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The Fund of Funds Signed an Agreement with the Team to Manage a Mezzanine/Growth Fund, Silverline Partners

January 27, 2021

The Fund of Funds (FoF) signed an agreement with the intermediary selected to implement the Mezzanine / Growth Fund. This is the most recent instrument in the FoF portfolio of equity and quasi-equity investments and the first one of its kind to be set up using public resources in Bulgaria. The resources for the fund are made available under the Operational Programme Innovation and Competitiveness 2014—2020 (OPIC), which is co-financed by the EU Regional Development Fund (ERDF).

The Fund of Funds (FoF) signed an agreement with the intermediary selected to implement the Mezzanine / Growth Fund. This is the most recent instrument in the FoF portfolio of equity and quasi-equity investments and the first one of its kind to be set up using public resources in Bulgaria. The resources for the fund are made available under the Operational Programme Innovation and Competitiveness 2014—2020 (OPIC), which is co-financed by the EU Regional Development Fund (ERDF).

It will be managed by Silverline Partners OOD. This is the name under which the Bulgarian Mezzanine Partners DZZD consortium will operate. The consortium was selected in a public procurement procedure for a financial intermediary. It includes the following partners: Evgeni Angelov, Diana Aladzhova, Ivan Hristanov, Lloyd Schultz and River Styx Capital EAD.

The key figures in the selected fund manager have gained significant experience in the management of alternative investment funds supporting companies in Bulgaria and in Central and Eastern Europe and elsewhere. Along with implementing equity instruments, the team has expertise in mezzanine lending, which will represent a considerable part of the portfolio of the newly set-up fund.

Mezzanine financing is a form of hybrid investment that falls in-between equity and debt financing. In general, it enables enterprises to raise venture financing without necessarily having to transfer a significant portion of ownership to the new investor.

Silverline Partners will manage BGN 83.7 million, of which BGN 75.3 million in public resources contributed by the main investor, the Fund of Funds. In addition, private capital will be raised at the fund level and in the exercise of each transaction.

The fund will provide support to at least 10 small and medium-sized enterprises by making investments ranging from BGN 4.9 million to BGN 13.7 million, with no less than half of the amount invested in the form of mezzanine financing.

The purpose of the instrument is to support the development of competitiveness of Bulgarian small and medium-sized enterprises (SMEs) at a mature stage of development. It will provide access to alternative financing for those having a potential for growth and looking to expand their activities by entering new markets or developing new products and services.

With the Mezzanine / Growth Fund, there are now five alternative investment funds financed by the FoF that are up and running. Until now, this type of instrument was not available on the market and its implementation will provide the resources necessary to cover the full life-cycle of a company’s development — from the idea to set up the company, through start-up till its mature phase.

Following the signing of the agreement, the intermediary is expected to make its first investments in the summer of the current year.

On the occasion of the signing, Vladimir Danailov, Executive Director and Board Member of the Fund of Funds, expressed his satisfaction with a professionally done job and said, “I am glad that Bulgarian business will now be able to benefit from a financial instrument for growth that is needed on our market. With this instrument, and with the rest of the financial instruments, we are promoting a new model of competitiveness of the Bulgarian economy, mostly through globally-oriented companies.”

“Bulgaria has entrepreneurs of a track record of professionalism and integrity, and companies with a regional and global potential. We are willing to work with them and to contribute for their success”, said Evgeni Angelov, Managing Partner of Silverline Partners.

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