Country:

Bosnia-Herzegovina

Title:

Small Equity Fund

Objective:

The Fund's principal investment objective is to achieve long-term capital appreciation by contributing to the modernisation, expansion, restructuring and development of small and medium sized private enterprises in Bosnia-Herzegovina, through equity and quasi-equity investments in commercially viable companies and projects. The Fund seeks to achieve its objective by taking a significant minority stake in the portfolio company through negotiated transactions while taking an active role to influence its operations and management.

Description:

The Bosnia-Herzegovina Equity Fund will be established as an unincorporated investment vehicle with a minimum capital of USD 10 million, of which USD 5 million to be contributed by a donor. A further USD 3 million is required for technical assistance. The Fund will be managed by a Fund Manager, which will be selected by the Bank. The Fund maturity is 10 years with exit over time through liquidation of each investment. The Fund Manager will seek to identify the best exit options on the basis of a realistic assessment of legal conditions in Bosnia-Herzegovina and exit mechanisms including put options, sale to strategic investors and management buy-outs. For each of the portfolio companies, exit strategies will be devised prior to investment, approved by the Investment Committee and agreed upon with each of the investee companies. Equity investment horizons in investee companies are expected to be 4-6 years with exits executed on a case-by-case basis.

Preparation Status:

Rationale for Donor Support:

Risk mitigation and TC component based on past experiences in Albania, Kosovo and FYR Macedonia

Amount Required:

USD 8 million min.

Financing Plan:

Borrower/Final Beneficiary

SMEs

Major Sector/Project Issues:

N/a

Contact numbers:

Funding enquiries:

Project enquiries: