February 1 (SeeNews) - Bulgaria's state-run Fund of Funds (FoF) said it signed an agreement with local consortium Silverline Partners to implement a new EU-financed mezzanine/growth fund.
Silverline Partners, comprising four private individuals and Sofia-based River Styx Capital, will manage 83.7 million levs ($51.7 million/42.8 million euro), of which 75.3 million levs in public resources contributed by the FoF, the FoF said in a statement last week.
The resources for the fund are made available under the Operational Programme Innovation and Competitiveness 2014—2020, which is co-financed by the EU Regional Development Fund.
Private capital will be raised at the fund level and in the exercise of each transaction.
The mezzanine/growth fund is the most recent instrument in the FoF portfolio of equity and quasi-equity investments and the first one of its kind to be set up using public resources in Bulgaria.
The fund will provide support to at least ten small and medium-sized enterprises (SMEs) by making investments ranging from 4.9 million levs to 13.7 million levs, with no less than half of the amount invested in the form of mezzanine financing.
"The purpose of the instrument is to support the development of competitiveness of Bulgarian SMEs at a mature stage of development. It will provide access to alternative financing for those having a potential for growth and looking to expand their activities by entering new markets or developing new products and services," the FoF also said.
Until now, this type of instrument was not available on the local market and its implementation will provide the resources necessary to cover the full life-cycle of a company’s development - from the idea to set up the company, through start-up till its mature phase, according to the FoF.
Silverline Partners is expected to make its first investments in the summer of 2021.
The FoF manages funding under four operational programmes. Its main activity is the structuring and management of financial instruments co-financed by the European Structural and Investment Funds during the 2014-2020 programming period.
(1 euro = 1.95583 levs)