ZeroSum Asset Management, an investment management company, has established ZeroSum Debt Fund I, a closed-end private debt fund. The Fund is aimed at companies in Lithuania and other countries in the Baltic and Scandinavian regions looking for the capital they need to expand their activities. The aim is to attract a total of 40 million euros to the Fund.
According to the founders of the Fund, ZeroSum Debt Fund I will invest directly in debt instruments of private companies, i.e. various debt securities issued by companies. The Fund will provide intermediate-term financing, mezzanine and bridge type loans, invest in corporate bonds, and indirectly lend to Baltic and Nordic companies that have a successful or promising start-up business model and development opportunities, but are facing a lack of capital.
“We see the need for alternative lending to businesses, as bank funding is still insufficient – only 26 percent of medium-sized businesses get a response from banks that meets their needs, and, in terms of the ratio of loans to GDP, Lithuanian businesses are the last in the EU. We are flexible and can offer a range of financing products and efficient solutions. We want to foster the growth and strength of businesses by solving their liquidity and development problems, and by offering solutions to manage their finances. Aiming to specialise not only in certain industries, we will have as diversified a portfolio as possible, selecting projects in each sector that are in line with the Fund’s strategy of the appropriate return/risk ratio,” Tomas Šidlauskas, a member of the Fund management team, says.
The ZeroSum Debt Fund I team consists of Tomas Šidlauskas, a Fund manager with more than 10 years of experience in leasing and financing, Tadas Teresevičius, a Fund manager with more than 15 years of experience in banking, financial services, and business management, and Mantas Pakėnas, a Fund manager with more than 20 years of experience in banking, investing and IT.
“Along with financing, the Fund will offer our experience in business financing to companies in Lithuania and other countries in the Baltic and Scandinavian regions which do not have sufficient capital for development. Our team works closely with investors, and we are highly experienced market participants who not only offer investment solutions, but also actively skin in the game,” Tadas Teresevičius, a member of the Board of the Fund management company, notes.
ZeroSum Debt Fund I aims to raise a total of 40 million euros. The Fund is expected to raise 10 million euros by the end of the year and the amount of funding provided in its first year of operation is expected to reach 30 million euros. The minimum investment amount is 125 thousand euros. The duration of the Fund’s activities is 8 years, but they will be extended for a further 2 years if necessary.
According to T. Tereskevičius, the Bank of Lithuania provided a permission for the Fund’s activities in the middle of this year. The process of attracting investors has already started and the first projects are being financed. The planned annual return on investments is 8–10 percent per annum before Fund fees. The Fund will also aim to pay annual dividends of 3–4 percent.
“We develop our activity strategy by responding to the situation in the market, and, if necessary, we react promptly to changes. In the future, we plan to continue expanding the basket of assets under management and to offer investors the products that best match their risk profile,” Mantas Pakėnas says.