KEY INSIGHTS (2/2): Financial Markets & M&A Round Table 2020
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DeimantÄ— KorsakaitÄ—, Executive Partner and IC Member INVL Asset Management (Lithuania)

 Private equity landscape in the Baltics.

The private equity market in the Baltic countries can now be described as a baby that eventually grew its creepers and measured more serious clothing. In the private equity market, we have not only a significant increase in the size of assets under management, money in the pocket for purchases, even two private equity funds in excess of 100 million EUR, but also managed to catch the first Lithuanian "unicorn". As funds grow, the geography of investing naturally expands.

2019 also noted the change in the ecosystem development cycle, with funds set up almost 10 years ago under the JEREMIE initiative successfully realizing a significant share of their investments last year.

The maturity of the market is also confirmed by the public statement of the EBRD representative that in 2021-2026 the EBRD's strategy for the Baltic States may be the last strategy for the region.

Despite the fact that we can observe a clear market maturity, however, the funds attracted and invested by private capital in the Baltic States are still extremely small if we measure them as a percentage of GDP and compare them with developed markets. Thus, we still have a lot of room for growth and in the transaction market private equity funds are likely to gain increasing weight.

The slowing economy, rising wages and geopolitical events are challenging the private capital market. However, whatever the weather outside the window, private equity funds have their own cycle and must work with the money entrusted to them and seek to earn the returns that investors expect them to entrust to them.