News and Analysis
Fund of Funds has selected fund manager to invest over BGN 67 mln. in hi-tech and innovative companies
Today, 20 February 2019, the Fund of Funds (FoF) announced the name of the financial intermediary selected to manage the Venture Capital Fund (VCF). The winner in the competitive procedure held by the FoF is the partnership Morningside Hill DZZD. Pavel Velkov, Ekaterina Velkova, Todor Mutafchiyski and Delyan Ganev are the key partners featured in the winning bidder’s offer.
The team has long-term experience with the management of venture investment funds both internationally and in Bulgaria. While the partners received their education and professional experience mainly in the US, they have supported investments and outputs across various countries overseas as well as in Europe and Africa.
The Venture Capital Fund will entrust the management of pubic funds in the amount of BGN 41.1 million from Operational Programme ‘Innovation and Competitiveness’ (OPIC) 2014–2020 co-financed by ESIF. In addition, the selected Fund Manager commits to mobilize private funding amounting to at least 30 % of the total mass of the investments so that the stream of investments in the target companies is expected to reach BGN 67 million. The funds will be used for equity and quasi-equity investments in innovative high-tech Small and Medium-size Enterprises (SMEs) during the early phases of their development. The resources invested in each company will range from BGN 1.7 million to BGN 7 million. The objective of the new VCF is to support SMEs in the first years after their establishment, because this is exactly the period in which many of these enterprises struggle to remain afloat due to a lack of resources and/or an efficient governance structure. In addition to the financial resources, the Fund Manager will provide strategic support to enable access to new markets and expertise by improving the recipients’ corporate governance and overall capacity.
Ms. Svetoslava Georgieva, CEO and Board Member of the FoF, outlined the impact of the selection of a financial intermediary: ‘Today we finalised yet another important procedure by setting up a fund which will invest in the coming years major public resources in the development of innovative and high-tech companies. This is the second equity instrument by which we foster entrepreneurship in Bulgaria. This year we will launch three more equity investment funds’.
An official agreement with the selected financial intermediary will be signed shortly.