Finnish Industry Investment Ltd., EQVITEC Partners Oy and the European Investment Bank have, under an agreement signed today, founded the EQVITEC Technology Mezzanine Fund, which will provide financing for companies specialising in technology and demonstrating strong growth potential. The Fund's objective, EUR 68 million in capital, will make it a large-scale fund in both Finnish and Nordic terms. The Fund would like to invite Finnish institutional investors in particular to join in its investment operations.
EQVITEC Technology Mezzanine Fund is initiating its investment operations with EUR 34 million in capital, half of which has been invested by the Finnish Industry Investment Ltd and half by the European Investment Bank. Its goal is to double its capital before the final closing of the Fund, mainly with capital provided by Finnish investors. Apart from domestic operations, the Fund can also invest in European business enterprises and global projects which, though initiated by European companies, are expected to involve Finnish technology enterprises. The Fund will be managed by EQVITEC Partners Oy.
The last couple of years have seen the emergence of a significant number of medium-sized enterprises boasting a high level of know-how. These enterprises need a well-balanced funding scheme and a sound balance sheet to safeguard their growth potential. In addition to direct investment in equities and pure external funding, this end can also be achieved by employing mezzanine instruments. Mezzanine funding can be used to cover the short-term funding needs of growing companies without changing the company's balance-sheet related goals and ownership structure.
"The initial investment made by Finnish Industry Investment Ltd. in the new Fund is a consistent follow-up to the company's efforts to reinvest the State's privatisation funds and to secure funding for Finnish growth-oriented companies. The Finnish Industry Investment Ltd's cooperation with the European Investment Bank will now provide Finnish companies with access to the vast amounts of capital available in Europe," says Juha Marjosola, Managing Director of Finnish Industry Investment Ltd.
"The emergence of growth-oriented companies specialising in technology and aiming to gain a foothold in the world market created a major need to set up a fund. In addition to know-how, solid funding is required, and EQVITEC Technology Mezzanine Fund can respond to this need," explains Matti Turunen, Managing Director of EQVITEC Partners Oy.
"This operation presents all the necessary elements to fulfil the objectives of economic growth and job creation that the EIB should pursue with its venture capital investments. We will, therefore, invest EUR 17 million (FIM 100 million) in the EQVITEC Technology Mezzanine Fund under the professional management of EQVITEC Partners, a specialist in the high-tech segment of the Finnish venture capital market. We are confident that this combination will ensure that some of the more than 6000 SMEs operating in the high-tech sector in Finland will benefit from an injection of mezzanine financing from EIB. This will contribute to the fostering of the overall competitiveness of the European industry," explains Ewald Nowotny, Vice President of the European Investment Bank.
EQVITEC Technology Mezzanine Fund is the first mezzanine fund in Finland specialising in technology. It is expected to be especially instrumental in the promotion of growth-oriented enterprises in the high-tech sector.