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Lithuanian Private Equity and Venture Capital Association

Lithuanian Private Equity and Venture Capital Association: New Board, Challenges and Help to Business

Lithuanian Private Equity and Venture Capital Association (LT VCA), which unites 35 active participants of the country‘s private equity and venture capital market, has elected a new board this May, which, while implementing its long-term goals, is ready to help businesses to get back on track during this critical period.

Rokas Pečiulaitis has been elected the new Chairman of the Board– he is the founder, president of the board and executive partner of the early venture capital fund “Contrarian Ventures”, as well as a board member of the association “Vilnius Marathon” (“Vilniaus Maratonas”). R. Pečiulaitis gained his extensive work experience while holding the position of a trader in the department of inflation and derivates of “Bank of America Merrill Lynch” in London.

For another 2-year term as board members have been re-elected Julius Dukšta, the investment manager of “LitCapital”, Mindaugas Utkevičius, a partner of “Livonia Partners”, and Tadas Gudaitis, the head of “Swedbank Investment Management” (“Swedbank investicijų valdymas”). Three new members have joined the board - Gintas Daniusevičius,  Chief Financial Officer of  “Practica Capital”, Šarūnas Stepukonis, partner of “Baltcap” infrastructure fund, and Kasparas Jurgelionis, partner of “Iron Wolf Capital”.

Lithuania based VCA, by making and implementing common policies of private equity and venture capital business together with state institutions and other partners, contributes to the consolidation of the Lithuanian economy, while the World is combating Covid-19. According to the new Chairman of the Board of VCA, Mr. R. Pečiulaitis, the role of venture capital is becoming increasingly important.

“Venture capital is one of the engines of economy, even though in Lithuania its contribution, especially during this crisis, when there are no liquidity and financing alternatives, is not so much recognized. Yet, Lithuania has made a rapid progress, which is evident from the record results of 2019. Funds attracted 484.8m EUR of capital, and investments peaked up to 36.9m EUR”, - comments R. Pečiulaitis.


Perspectives and challenges of the market

Even though businesses are now facing a strong financial decline, however, according to R. Pečiulaitis, the business sector will begin to feel the consequences of Covid-19 only now, therefore it is essential to provide a strong backup for the sector – namely the venture capital funds, which may ensure the continuity of activity of companies in the long run and allow the popping up of a large number of new competitive companies on the international market.

“Venture capital is a vital link of finances and economy, when companies need to reinforce their balances or to attract capital for development. Active investors are able to mitigate the consequences experienced by businesses and to save a lot of those in trouble, by assuming risks and providing not only capital, but knowledge too”, - says the representative of the board of VCA.

If we look at the perspectives of the market, technological companies are becoming the biggest winners in this critical situation. ”Businesses will have to implement large scale structural reforms, one of which is the application of technological solutions. Digitisation will become a priority of each business and more companies will feel the urge to invest into new technologies.” – emphasises R. Pečiulaitis.

Help of VCA to business sector

Regardless of challenges that have been brought upon markets by the pandemic, they have not changed the principles guiding the activity of VCA and its member funds, therefore they are avidly contributing to the mitigation of consequences of this crisis, by actively investing into companies and by taking their part in the provision of the necessary medical equipment.

There are numerous inspiring examples. JSC “Audimas” has launched the production of items of personal protection during the quarantine. The products are being supplied both to Lithuanian and foreign medical facilities and other organisations. A new activity has been also taken up by JSC “Labochema LT” – the company has organised the provision of the necessary safeguards to the medical personnel, the total value of which exceeds 800k EUR. Another company “Infra Group” has donated various products to the medical personnel in the amount of 110k EUR, and convinced its partners to make further donations for another lump sum of 83k EUR. All these contributions will help to survive the times of trial, but any significant returns are not to be expected.

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“Looking back at the previous financial crisis, it is to be noted that funds, which began their activities during the crisis, had ones of the best return indicators, however, in 2020 it is expected that the attraction of funds from private and especially foreign institutional investors will slow down”, - predicts R. Pečiulaitis.

In order to provide the necessary financial support to businesses, the board of VCA has envisaged certain strategic steps.

“We are going to keep strengthening the legislative basis for the venture capital, to expand international partnerships with foreign institutional investors, private and strategic investors, to educate about the benefits and advantages of venture capital, and to build competences of our members internally”, - explains R. Pečiulaitis.

A greater involvement of the state is expected

Currently the available capital of investment funds amounts to about 700m EUR. These assets should be a significant injection into business, if only a smooth way of cooperation with the state is ensured.

 “Especially now, when the activity of private and institutional investors is on decline, the state should assume a more significant role, in order to counterweight the diminishing of the available private funds”, - comments R. Pečiulaitis.

According to the Chairman of the Board of VCA, this association has gathered a united team of experienced specialists, whose competence should be employed by the Government for the planning and development of further financial solutions to tackle Covid-19.

“The use of Government resources is currently quite limited, but the association could become a bridge which ensures the dialogue between the venture capital community and the state. This is evident from the foreign examples, where independent advisers from the largest financial intermediaries and funds assist the state in designing the most effective models and thus ensuring the utilisation of financial resources”, - shares his insights R. Pečiulaitis.

More info:

Rokas Pečiulaitis
Lithuanian Private Equity and Venture Capital Association (LT VCA)
Chairman of the Board
Ph. No. +370 616 01791
E-mail rp@cventures.vc

Skaistė Budbergytė-Zabielaitė
Lithuanian Private Equity and Venture Capital Association (LT VCA)
Director
Ph. No. +370 659 77759
E-mail skaiste@vca.lt

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