Investment strategy

Investment process

After receiving investment proposal, the Fund manager will check if it satisfies the main investment criteria (see Investment criteria). When the proposal satisfies the main criteria, the Fund manager will initiate meeting with the founders of the company and will discuss in detail its business plan.

When business plan meets Fund’s return on investment criteria and management team is strong enough to implement business plan, then:

  • Negotiations with business owners are being held, at the same time the Fund manager is looking for Business Angel,
  • Parties sign Term Sheet disclosing the main investment terms,
  • Legal and financial Due Diligence are being performed,
  • Negotiations about final terms of investment,
  • Investment, Shareholders, Share Purchase and (or) Convertible bonds purchase Agreements are signed.

Activities after acquisition

The Fund manager and shareholders establish Board, consisting of Business Angel, representatives of the Fund manager and shareholders. The Board and management of the company meet on regular basis to discuss the results of business plan implementation. Partners take decisions about business expansion strategy, its changes and implementation tactics.

Investment areas

Investment targets are all the production and service companies with some exceptions (see „Exceptions“).

The priority will be set on the companies that operate in Lithuania and focus their activities to export markets.

Priority sectors are:

  • Innovative technologies, environmentally-friendly, research-based technology and innovation developers and manufacturing companies,
  • Production of high added value components,
  • Economically viable companies operating in traditional industries,
  • Service and business solutions.

The Fund will invest into companies the value of which can be significantly increased by:

  • Modernization of manufacturing,
  • Development of new product or service,
  • Improving business effectiveness and implementing expansion,
  • Acquiring and retaining licenses and continuing scientific research activities, having commercial potential,
  • Strengthening balance sheet of the company.

Exceptions

The Fund will not invest into the companies that are in:

  • Primarily engaged in the manufacture, supply or trade in arms,
  • Production of  tobacco and alcohol,
  • Cazino activities or other gambling services,
  • Genetically modified products manufacturing and sales,
  • Fishery, aquaculture and agricultural products,
  • Consumer finance and other close to banking activities,
  • Real estate development,
  • Dismantling and construction of nuclear power plants,
  • Airport infrastructure, with the exception of installation of environmentally-friendly technologies,

The Fund would also not invest in companies that are in serious financial difficulties, and companies whose activities are polluting the environment, which is detrimental to health and safety.

Investment criteria

  1. The company is active in the market for at least 1.5 year, production or services are produced (created) in Lithuania, necessary investments is up to EUR 1 200 000,
  2. Owners and management of the company have clear business expansion plan oriented to export,
  3. Owners are ready to cooperate with the Fund manager and Business Angel, work together in strategic management team, share actual financial and business information and future returns,
  4. Future returns and relevant risk level is acceptable to Fund and Business Angel,
  5. The activities of the company are included in the Fund’s Investment List (see “Investment Areas”).

sustainability

UAB Verslo angelų fondo valdymas (hereinafter – the Fund manager) sustainability policy.

Disclosure of sustainability-related information

In this part, we disclose the documents and information as determined in 27 November, 2019, Regulation (EU) 2019/2088 of the European Parliament and of the Council (hereinafter – the Regulation) and 6 April, 2022 Commission Delegated Regulation (EU) 2022/1288.

Information is disclosed about the IISUTIB KŪB Business Angels Fund II managed by the Fund Manager. Currently, KŪB Business Angels Fund I is in the process of exiting investments (being liquidated), it operates independently, without an external fund manager.

Implementation of sustainability principles in products

The Fund manager manages the venture capital fund (hereinafter – the Fund) in accordance with the Law on Collective Investment Entities for Informed Investors of the Republic of Lithuania. This fund invests in shares of closed joint-stock companies established in Lithuania, convertible bonds, and convertible loans. We are also conducting the sale (liquidation) process of KŪB Business Angels Fund I investments. Depending on the different funds‘ investment strategy and investment horizon, the integration of sustainability risks and principles varies.

Sustainability information about IISUTIB KŪB Business Angels Fund II is disclosed in accordance with Article 23 of Directive 2011/61/EU, clause 1, this information is provided only to the investors of the fund, because the fund is closed-end and therefore its information is not public. This fund promotes environmental and social aspects, but sustainable investment is not the goal of the fund. It has a policy of not investing in companies that engage in the following activities:

– Arms production or other military activities,

– Production of tobacco products and alcohol,

– Casino activities or other gambling services,

– Production or trade of genetically modified products,

– Activities that pollute the environment, harm health and safety.

Sustainability information about KŪB Business Angels Fund I is disclosed in accordance with Article 23 of Directive 2011/61/EU, clause 1, this information is provided only to the investors of the fund, because the fund is closed-end and therefore its information is not public. This fund promotes environmental and social aspects, but sustainable investment is not the goal of the fund. It has a policy of not investing in companies that engage in the following activities:

– Activities that pollute the environment, harm health and safety,

– Arms production or other military activities,

– Production of tobacco products and alcohol,

– Casino activities or other gambling services,

– Activities related to the conduct or promotion of research related to human cloning or are in some other way related to these activities.

Integrating sustainability risk into the investment decision-making process

The Fund managed by the Fund manager does not have a sustainable investment objective, but the Fund promotes the implementation of environmental and social sustainability goals in investments. When evaluating potential investments, the due diligence stage assesses existing and potential sustainability risks and their potential impact on the future return of the relevant investment. Although the Fund does not aim to invest in sustainable companies, it may invest in companies with a sustainability objective.

Assessment of the main negative impacts on sustainability

The main negative impact is the impact of investment decisions, which leads to a negative impact on sustainability factors.

The Fund manager does not take into account the main negative impact of investment decisions.

The Fund acquires investments when they are at the initial stage of their development, their results change strongly over time, i.e. they can rapidly improve or deteriorate due to market conditions or other factors not dependant on the Fund manager, therefore, objectively assessing the negative impact of an investment on sustainability is difficult. The fund manager invests after pre-assessing the business plan prepared by the companies, so he has the opportunity to decide not to invest before the investment, if he assesses that there may be significant risks related to sustainability.

Transparency of remuneration policy in relation to sustainability risk integration

The Fund manager has a policy that the total amount of the remuneration and its bonuses should promote sound management of the Fund manager‘s risks, including those related to sustainability.

Estimating the likely impact of sustainability risk on returns

The Fund manager has accumulated solid investment experience, therefore he understands that every investment may face risks related to sustainability, and if they occur, the value and liquidity of the investments may increase or decrease. Therefore, before making a decision to invest, the Fund manager assesses the probability of occurrence of possible risks related to sustainability and the inclination of the company’s management to reduce or eliminate these risks.

Partners