Baltic VCA-s announcement on the misconduct at BaltCap

29 February 2024
Tags: baltcap

In November 2023 BaltCap, a relevant player in the Baltic PE/VC industry, publicly announced misconduct in its Infrastructure Fund in Lithuania. According to Baltcap, a now former partner of the fund Šarunas Stepukonis had managed to embezzle amounts estimated to be as high as 40 million euros. Lithuanian and EU investigative authorities have launched criminal proceedings in the case.

The Baltic Private Equity and Venture Capital Associations (Baltic VCA-s) and our members are deeply concerned about these developments. As the circumstances impact the wider investor community, we call upon the case to be treated with utmost solemness and attention. The Baltic VCA-s are actively working with the market regulators in Estonia, Latvia, and Lithuania, industry inspectorates as well as pension funds and fund investors to fully understand the essence of the fraud.

“BaltCap has a long, reputable history in the Baltic PE and VC industry. The information on the kind of criminal misconduct of the fund’s employee is deeply concerning. We aspire to a corporate culture that promotes the highest standards possible and take this case very seriously. Although infrastructure funds operate inherently differently than the rest of the PE and VC industry, a thorough examination is needed to prevent such misconduct from ever happening again”, says Kaari Kink, the Chair of Estonian Private Equity and Venture Capital Association (EstVCA).

Kadri Lindpere, the Managing Director of EstVCA: “Being a relatively small market, we have already from the establishment of the PE/VC market been mindful of building the industry on international standards. This includes fund creation legislation and risk management as well as compliance procedures and standards. Our Baltic PE/VC associations represent around 80 PE/VC funds in the region and together we have been working for 15+ years to create a solid and outstanding investment environment and we have to continue close collaboration to ensure the trust is rebuilt properly”, she comments.

Lindpere adds that all the Baltic associations have since the announcement of the fraud been actively discussing the case with various fund investors in Europe and the Baltic region and have an assurance of investors’ continuous interest in the region as fund returns and diverse strategies provide well-grounded investment possibilities.

About the Baltic PE/VC market

The Baltic Private Equity and Venture Capital market has witnessed exponential growth over the past decade. Since 2010 more than €2.2 billion in new funds have been raised. The number of active funds has doubled since 2018 to over 80 today. The limited partner investor base has diversified significantly over that time. Development funds play a key role while local pension funds today offer significant backing alongside domestic and international family offices, fund of funds, and the like. Professional general partners today have about €1 billion dry powder to support primarily Baltic yet increasingly also neighboring economies.

Latest news from BaltCap on the fraud case (27 Feb 2024):

Further information:

Kadri Lindpere
Managing Director

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