Silverline Partners, the financial intermediary selected by the Fund of Funds (FoF), has commenced activities to make direct investments in Bulgarian companies that have reached a stage of maturity and which, through an appropriate mix of equity and debt (mezzanine) financing, could realise their potential for exponential growth.
With the help of public resources under the Operational Programme for Innovation and Competitiveness 2014−2020 (OPIC), co-financed by the European Regional Development Fund, this type of blended financing will be available for the first time in Bulgaria. Its structuring has been made possible thanks to the extensive management experience and expertise of the investment fund selected by the FoF.
Silverline Partners will manage BGN 83.7 million, of which BGN 75.3 million in public funds provided by the Fund of Funds. Additionally, private capital will be raised at the company level of no less than 30% of the investment amount. The investment period is until the end of 2023.
The Fund will support at least 10 small and medium-sized enterprises by with investments of between BGN 4.9 million and BGN 13.7 million, a large part of which may be invested in the form of convertible subordinated debt (mezzanine financing) − a hybrid between debt and equity financing.
The purpose of the instrument is to support the growth and competitiveness of Bulgarian small and medium-sized enterprises (SMEs) in a mature stage of development. It will provide access to alternative financing for those SMEs seeking to expand their activities by entering new markets or developing new products and services.
‘This long-awaited instrument fills a market vacuum for financing more mature, but equally innovative and dynamic companies, which are typical for the portfolios of funds covering the earlier stage of business development. Based on additional market analysis and the performance results of Silverline Partners, we expect to structure similar types of funds in the new 2021−2027 programming period’, said Martin Gikov, CEO and Chairman of the Board of Directors of the Fund of Funds.
Evgeni Angelov, Managing Partner of Silverline Capital, added: ‘Silverline Capital has a team of professionals with more than 80 years of experience in strategic management and investments and three successfully implemented funds on their track record. The team brings together experts with diverse profiles who operate with an international network of partners. The fund will invest, as a priority, in vital sectors of the economy with growth potential and ambitious entrepreneurs with proven business models. With these investments, our team will aim to support the establishment of Bulgarian and regional leaders in various industries, helping companies to overcome growth challenges and tap on their full potential.’
The Mezzanine/Growth Fund brings the number of operating FoF-funded equity investment funds to five. Its implementation, in addition to the other four equity funds, provides the necessary resources to cover the entire life cycle of a company's development − from the concept idea, through the seed stage to maturity.
