New Bulgarian Mezzanine Fund Will Invest €38.5 M in Small and Medium-Sized Enterprises

New Bulgarian Mezzanine Fund Will Invest €38.5 M in Small and Medium-Sized Enterprises

The long-awaited solution for Bulgarian small to medium-sized enterprises was finally released by launching the Bulgarian Mezzanine Partners fund. The fund will manage a total of €38.5 M public resources received from the Bulgarian Fund of the Funds, established under the EU operational programme „Innovation and Competitiveness 2014-2020” and also plans to raise additional private financing of at least €16.5 M. The raised amount of €38.5 M should be invested in the next 5 years.

Mezzanine financing is a type of quasi-equity investment between equity and debt financing. Generally, it enables enterprises to raise risk financing without necessarily having to transfer a significant portion of their equity to the new investor. Mezzanine financing is known as an alternative way for enterprises to receive funding when banks or other credit institutions cannot provide financing. In return, the investor takes little or none of the shares of the company but requires a higher interest rates instead.

Bulgarian Mezzanine Partners fund will be managed by a partnership between the former Bulgarian Deputy Minister of Economy, Evgeni Angelov, the entrepreneur Elvin Guri along with Ivan Hristanov, Diana Aladzhova, Eleonora Sarbova, and Lloyd Schultz. The fund will support potentially growing small and medium-sized Bulgarian enterprises at a mature phase of development. The approved enterprises will be entitled to receive an amount in the range of €2.5 M to €7 M. Bulgarian Mezzanine Partners will be focusing mainly on traditional businesses aiming to increase their productivity and export potential. The investment will also provide access to alternative financing for companies with plans to expand and improve operations, including entry into new markets.

“We’ll invest in around ten companies. The focus is on rather traditional industries and export-oriented businesses. There are already enough funds for tech companies. We are not looking for unicorns,” commented Evgeni Angelov.

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