The Three Seas Initiative Investment Fund officially established
On the 5th of June, during the Three Seas Initiative Summit in Ljubljana, CEOs of Polish Bank Gospodarstwa Krajowego and EximBank Romania announced officially the establishment of The Three Seas Initiative Investment Fund. The Fund will focus on transport, energy and digital infrastructure projects in the Three Seas region.
On the 29th of May Polish Bank Gospodarstwa Krajowego (BGK) and Romanian EximBank signed incorporation act in Luxembourg. The fund is going to operate under Luxembourg law on commercial basis and market principles.
– Usually it takes about 20 to 30 months of negotiation on the strategy and legal framework for this type of funds. The Three Seas team have managed to achieve this in just a couple of months and we, as development banks, are righteously proud of it. It is a huge achievement on the European and even global level – underlinedBeata Daszynska-Muzyczka, CEO of Bank Gospodarstwa Krajowego (BGK).
– The Three Seas Initiative Investment Fund comes to add on to the European Union programs and to boost the competitive level of the countries in the Three Seas Initiative region. It was a privilege for EximBank Romania to be one of the founders of this Fund that we are deeply convinced itwill contribute to a strong economic future for our united Europe” – declared Traian Halalai, Executive President of EximBank Romania.
In accordance with the rules for the establishment of investment funds, an independent governing body and a depositary bank are selected. Fuchs Asset Management was appointed as the Alternative Investment Fund Manager (AIFM), responsible for risk management, portfolio management, governance and distribution of the Fund. Fuchs’ team will be assisted by investment advisors in the selection and analysis of potential investments to be recommended to the different investment committees.
– We are delighted to collaborate with the Three Seas Initiative Investment Fund as their AIFM. This Fund represents a significant venture for the targeted region, as well as for the whole European Union, allowing greater integration, mobility and communication between its member countries in the future. Our appointment in this undertaking underlines our organisations’ shared goals to contribute to the future of Europe by joining forces with other seasoned professionals who are willing to engage for our common future – said Timothé Fuchs, CEO of Fuchs Asset Management.
The Fund furthermore intends to appoint Credit Suisse Fund Services (Luxembourg) S.A. as central administration agent and Credit Suisse (Luxembourg) S.A. as depositary bank.
The fund’s resources will come from various sources. The institutions which established the fund have both made investment commitments, and the total amount at this moment exceeds EUR 500 million. The Fund is now open for other Three Seas countries to join once the necessary permits are obtained. Each of the Three Seas countries will be considered as a Founding Partner and representatives of development banks from Poland, Romania and the Czech Republic are members of the fund’s supervisory board. The appointed Management Board will oversee the implementation of the investment strategy agreed by the Fund’s manager between the countries. In order to continually re-evaluate the key needs in the Three Seas region, meetings will be held in each of the countries participating in the Fund on a rotating basis.
Additional investors will be targeted among pension funds, private equity funds, private investors and others. The estimated objective of the fund is to raise EUR 3-5 billion.
The Three Seas Initiative Investment Fund will carry out projects in areas that have been identified as priorities for the Three Seas region. These are sustainable transport infrastructure (i.e. railways, inland waterways, ports, and motorways) ; the energy sector and digital infrastructure.
The plan is for the Fund is to engage, on a commercial basis, in infrastructure projects with a total value up to EUR 100 billion, while the needs in the Three Seas region have been estimated at over EUR 570 billion.
The Fund is to enhance other financing sources, such as national resources of individual countries in the region or the EU funds. The investment strategy assumes the possibility to invest in various projects at various stages of advancement. These may include, among others, Greenfield Investments or already undertaken, the so-called Brownfield Investments, acquisition of shares, participation in Special Purpose Vehicles or subordinated debt.
The Three Seas Initiative Investment Fund will support and supplement the EU programs and also will strengthen the competitiveness of the EU itself.
Three Seas Initiative is a political platform of 12 EU Member States situated between the Baltic, Adriatic and Black Seas – Austria, Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia. These countries cover 28% of the EU’s territory and 22% of its population (114 million people).
The goals of the Three Seas Initiative are:
• To boost connectivity within the region, in particular on energy, transport infrastructure, and digital communication;
• To stimulate economic development, contributing to east–west and north–south cohesion within the European Union;
• To facilitate achieving real convergence among EU Member States and strengthen the European Union as a whole.
The European Commission recognises the contribution of the Three Seas Initiative to regional development, which leads to greater cohesion of the Union as a whole.
BGK is a state development bank which initiates and implements projects promoting economic growth in Poland and enhancing the quality of citizens lives. BGK develops guarantees and sureties schemes which contribute to commercial development. One of the important tasks of BGK is also to support the activities of Polish companies abroad. BGK manages European programmes and distributes EU funds at the national and regional level. BGK is also involved in programs aiming at improving access to housing on the residential market.
EximBank has been actively involved for more than 25 years in supporting and promoting the Romanian business environment by endorsing the local companies’ projects. Starting up as an export agency, EximBank has evolved and extended this role keeping its unique profile on the market. Acting as Romanian state agent for guarantees and insurance, EximBank is the main channel for infusing the Romanian state funds into the real economy in order to sustain increasing competitiveness of local companies.
Fuchs Asset Management (“FAM”) is a Luxembourg-based management company dedicated to fund governance within the family-owned Fuchs & Associés Group offering services to both EU and non-EU managers who seek long-term partnering for the creation, launch and continuing administration of their EU funds. FAM provides a wide-range of governance, distribution, risk management, and compliance solutions, in addition to portfolio management. FAM’s offering covers traditional UCITS in addition to alternative investment strategies, such as hedge funds, real estate, private equity and RAIF structures. With headquarters in Luxembourg, one of the top European financial centres, the group benefits from the expertise of over 150 top-tier professionals who are located either in Luxembourg itself, Brussels or Geneva. These experienced professionals form an international team who live and believe in the core values of the group, namely Independence, Commitment, Reliability, Human Dimension and Innovation.