Welcome to the BaltCap December newsletter! Here is a summary of the year.
For BaltCap, 2023 marks the maturation of many of our funds. We made seven new investments and eight add-ons while continuing our mission to build business champions. This year also marks the launch of two new funds—€200 million successor funds for the BaltCap Infrastructure strategy, and NordicNinja VC.
In 2023, BaltCap achieved some significant firsts—our buyout team completed the first take-private transaction by a Baltic investor on the London Stock Exchange. Additionally, BaltCap became Estonia's first dedicated PE house to receive a full alternative investment fund manager’s licence.
A regrettable incident has overshadowed the otherwise successful record we put together in 2023. We recently discovered a misconduct by our now former colleague Sarunas Stepukonis in the first infrastructure fund. While the internal and external investigations of the misconduct are ongoing, I stress that all other BaltCap funds are managed according to the highest standards, and all our funds are strong, profitable, and their integrity is unchallenged, something we are very proud of. We will learn from our mistakes, and BaltCap will continue to grow more robust and wiser.
I wish you a happy holiday season and a successful new year!
Peeter Saks
Managing Partner
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4 new investments: Hansamatrix, Delamode, Hansab, Iglu Holdings
5 add-ons: Piletilevi Group, Adoro, Alma Littera, Workland
BPEF III added four new platform investments in 2023. Two of the investments—HansaMatrix and Delamode—were the first take-private transactions by BaltCap. HansaMatrix is one of Northern Europe's leading electronic systems and components manufacturers. Delamode provides freight-forwarding, logistics, and transport support solutions in the CEE and the UK. The Delamode deal was the first take-private transaction by a Baltic investor on the London Stock Exchange.
In addition, the leading Baltic automation services provider, Hansab Group, was acquired, and a Latvia-based multi-sector production company, Iglu, was added to the BPEF III Portfolio.
Altogether, six remarkable add-ons were made by buyout fund companies Piletilevi Group, Workland, Adoro and Alma Littera to expand the business across Europe.
A noteworthy event took place in February, when Coffee Address, a BPEF II company, listed its bonds on the Nasdaq First North market.
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3 add-ons: Vet Ventures
Main highlight: Opening the most modern retirement home in Lithuania
Growth fund portfolio companies actively pursued organic and M&A opportunities during the year. Highlights from the portfolio in 2023: Vet Ventures, the group of pet clinics operating across the Baltics, made three add-on investments by acquiring two clinics and opening one brand new clinic; Gemma, the retirement home chain in Lithuania, opened a new elderly house in Vievis, the most modern retirement home complex in Lithuania; the fund’s retail businesses, Livin, Weekend and Tradehouse, opened five new shops across the Baltics, the latter also launched a showroom in Finland; and last but not least, our portfolio company Nord Security held a new financing round, resulting in their valuation doubling.
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New fund: BaltCap Infrastructure Fund II launched
3 new investments: VKG Elektrivõrgud, Marijampolė wind farm, ESCO Modernisation
In 2023, BaltCap Infrastructure Fund I (BInF I) commissioned several remarkable educational projects and social infrastructure projects in Lithuania and Poland. Importantly, electricity production in the Šakiai wind farm’s power plant started in 2023. Additionally, a joint venture of BInF I and AJP Capital inaugurated the largest solar power plant in Latvia, at 6.5 MW.
In October, BaltCap held the first closing of its €200 million target BaltCap Infrastructure Fund II (BInF II). The 20-year successor fund aims to increase the region's resilience, focusing on renewable energy generation, energy demand reduction, and social and transport infrastructure investments in the Baltics and Poland. BInF II signed its first deals, including the first deal in Estonia to acquire full ownership in VKG Elektrivõrgud, Estonia's second-largest electricity distribution network operator; developing Marijampole wind farm in Lithuania and the ESCO project to modernise municipal infrastructure in Poland.
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New Fund: NordicNinja II launched
New Investment: Arbonics
NordicNinja VC, the Japanese–European joint venture of BaltCap and JBIC IG Partners, announced a new €200M Fund II focusing on investments in climate tech, deep tech, and digital society to help the founders tackle global challenges. Building upon its presence in the Nordics and the Baltics, the fund is expanding its operations to the UK, Ireland, and the Benelux countries.
In December 2023, the new fund made its first deal when investing in Arbonics—the nature tech pioneer building Europe's highest-quality, scalable forest carbon removal platform.
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In 2023, we welcomed four new team members to our Tallinn, Riga, and Warsaw offices to strengthen our operations team further and add expertise to our new infrastructure fund. We also onboarded five talented interns during the summer and were inspired by their fresh ideas and outstanding financial skills.
Throughout the year, BaltCap team members actively presented at numerous conferences. To highlight—we lectured at special private equity courses launched in collaboration with Estonian and Lithuanian PE and VC associations and leading universities. These courses introduced over 300 students to the private equity industry, its sustainability practices, and responsible investment principles.
One distinct event for our team in 2023 was completing the Tartu Ski Marathon team relay. Four team members completed 63 kilometres of skiing in less than four hours, with others cheering along the way. We are utmost proud of the BaltCap team and our company culture that celebrates a can-do attitude, passionate determination, and hard work.
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November and December: Team and Portfolio News
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BaltCap Infrastructure kicks off by integrating biodiversity into operations, and appointing a biodiversity champion
Through its wind park investment Zvirgzdaiciu energija, the BaltCap Infrastructure Fund participated in Nefco’s Biodiversity Pilot Programme. Addressing the unprecedented loss of biodiversity and nature, the programme’s main aim was to test and develop suitable biodiversity solutions in collaboration with companies, and set an example for nature-positive impact strategies among financial institutions.
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Matiss Paegle at the Baltic Sustainability Awards 2023
At this event, which celebrated sustainability, innovation, and change-makers across the Baltics, BaltCap’s Investment Director took part in a discussion on investing in climate solutions. Key takeaways from the panel include: demand for sustainability must increase; political leadership must adhere to the EU taxonomy principles; and improved functioning of the markets.
– Read more
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Kristjan Kalda to represent BaltCap in the EstVCA management board
Recently, the new management board of the Estonian Private Equity & Venture Capital Association (EstVCA) was announced. Kaari Kink (Superangel) was appointed Chairman of the EstVCA board, and BaltCap is proud to be represented by our founding partner, Kristjan Kalda.
– Read more
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BaltCap-backed Gemma opened the most modern retirement home in Lithuania
The new Vievis House is equipped with state-of-the-art facilities to take care of seniors and focuses on the privacy of its residents. With 58 single and 51 double rooms, it eases a shortage of private rooms in Lithuanian retirement facilities, as only 8% of currently offered rooms are single.
– Read more
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BaltCap welcomes new team members
Further building its operations team to meet the increasing expectations of various stakeholders, BaltCap welcomes Birgit Kruusmaa and Kristin Karp, our new Reporting Specialists based in the BaltCap Tallinn office. Birgit and Kristin will be responsible for the delivery of diverse financial and sustainability reports to our LPs, public institutions, industry associations, and other key stakeholders.
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BaltCap backs outstanding students of SSE Riga
In cooperation with the Alumni Association of the Stockholm School of Economics in Riga, BaltCap granted a scholarship for outstanding academic performance to two exceptional students—Robijs Lūkass Mālnieks and Mikk Saard—both of whom are in their second year at SSE Riga. Representing BaltCap at the event, SSE Riga alumnus Juris Parups had the privilege of handing over the certificates.
– Read more
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