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The first Bulgarian mezzanine fund Silverline Capital launches with €42М to offer alternative SMEs financing

Silverline Capital
Image credit: Managing Partners of Silverline Capital
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Silverline Capital, the first Bulgarian mezzanine fund, launches investment activity, to provide local mid-market mature businesses with mezzanine and equity financing. The private equity fund is co-financed by FMFIB and is the last (quasi-) equity financial instrument in which FoFinvests under its current mandate. 

Silverline Partners will manage €42М, of which €37М in public resources subscribed by FMFIB. Private equity will also be raised both at the fund level and upon every investment deal. By 2023, when the investment period ends, the fund aims to provide support to at least 10 SMEs with investments ranging from €2.5 to €7M. 

In an interview for The Recursive, Evgeny Angelov, Managing Partner at Silverline Capital, and a Chairman at the Bulgarian Private Equity and Venture Capital Association (BVCA) shares more about the investment strategy and future plans ahead of the mezzanine fund.  

“We fill in an important and until now a missing niche in the Bulgarian private capital ecosystem by supporting mature companies in need of growth capital. Silverline Capital investments will range from €2.5M to €7M (and potentially up to €10M), which is sufficient for the vast majority of SMEs. We also work with other funds in Europe and the US which gives our future portfolio companies the opportunity to double or triple their investment rounds, as needed,” Angelov highlights. 

A-team of CEE growth equity professionals

Silverline Capital is managed by Evgeny Angelov, Partner at Postscriptum Ventures, Lloyd Schultz who was Director of Syntaxis Capital, a CEE private equity mezzanine firm, Diana Aladzhova, and Marina Buchova who were both with Empower Capital previously. Together, the team has more than 85 years of combined finance and C-level management experience. They have invested over €200M in more than 55 SEE and CEE companies at various stages of development. 

Having such extensive experience in the regional investment ecosystem, the partners of Silverline Capital are well-connected with earlier-stage SEE venture funds. Right now, they actively scout for scale-ups that have matured and need additional capital to grow. Normally, VCs compete with each other for promising companies, we see our role as complementary. 

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Industry-agnostic approach and hybrid financing

“While venture capital financing focuses on specific tech verticals and market growth trends, Silverline Capital tends to focus on fundamental analysis. We look at metrics such as EBITDA and discounted cash flow projections, which are characteristic of more mature companies. In addition to capital, we engage with portfolio companies to support their revenue growth and in the adoption of industry best-practices,” Angelov explains. 

Therefore, Silverline Capital follows a sector-agnostic approach. Pipeline opportunities often come from the Healthcare, Transportation & Logistics, Manufacturing, Consumer & Retail, Services, or Manufacturing industries. The fund looks for profitable business models, potential for operational and positioning improvement, and scope for international expansion. Typically, target companies would also need to have revenue above €3M. 

The growth strategies and goals of the companies are also important. Silverline Capital supports companies that aim to expand both geographically and product-wise, as well as companies that strive to make acquisitions and buy-outs. 

Half of the funding will come in the form of mezzanine financing which is a type of hybrid investment that falls between equity and debt financing. This gives entrepreneurs the opportunity to raise capital with minimal ownership dilution. The types of financing that Silverline Capital provides are mezzanine, subordinated debt, convertible debt, and equity. 

Positioning in the local and European ecosystems

With the start of the investment operations of Silverline Capital, FMFIB becomes an anchor investor in five alternative investment funds that cover the full SME development life-cycle – from the idea to the mature phase. The other four funds are Innovation Capital, Vitosha Venture Partners, NV3, and Morningside Hill Capital Management. 

On a European level, Angelov has observed that mezzanine funds have the tendency to grow in size and to start fulfilling part of the role of banks by giving companies both subordinate and senior loans. However, they are mostly focused on Western Europe, and some show signs of transforming into credit funds offering SMEs a full spectrum of debt financing solutions.

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Silverline Capital is expected to start making its first investments in the summer of 2022.


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Elena is an Innovation Reporter at The Recursive, an online media dedicated to the emerging tech and startup ecosystems in Southeast Europe. She is keen on sharing the innovation stories that shape the regional ecosystem and has a great interest in fintech, IoT, and biotech startups. Elena is currently finishing her Bachelor's Degree in Business Administration and Political Science at the American University in Bulgaria.