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Update No.16
October 2025

Greetings from Merito Partners

As the investment landscape enters a traditionally active season, Merito Partners continues to pursue opportunities with strong fundamentals and clear value-creation potential. Our pipeline remains active — especially in real estate special situations — but this time we want to highlight another theme that is attracting growing interest from our investors: evergreen investments.

In this edition, we share how these structures are evolving in our region and introduce two new evergreen projects that Merito Partners is currently developing.

What Are Evergreen Investments — And Why Are Investors Increasingly Turning to Them?

In today’s changing markets, many investors are looking for stability and long-term value. Evergreen investments are designed without a fixed end date. Unlike traditional private equity funds that must sell their assets within 5–7 years, evergreen funds offer flexibility, longevity, and compounding growth — making them more attractive to long-term investors.

“Our favorite holding period is forever“
Warren Buffett

Globally, family offices, pension funds, and institutional investors are allocating more capital to evergreen platforms. Why? Because these structures allow for:

• Long-term value creation without the pressure of short-term exits
• Recurring dividend yields and reinvestment possibilities
• Capital compounding, driven by steady earnings and strategic reinvestments
• Strong alignment with management, often resulting in more patient and sustainable business growth

Returns in evergreen structures come from two sources: regular dividends from cash flow and value growth of the business itself, measured through independent valuations. This way, investors enjoy income today and compounding growth over time.

Evergreen funds are becoming a global trend. Below are some useful reports and articles that explain why investors are paying more attention to this model:

• What’s in Your Evergreen Private Equity Strategy? — KKR (2025) – KKR
  A detailed guide on structuring evergreen PE strategies, discussing valuation, liquidity, fee structure, and operational challenges.
• Evergreen Funds – 2025 Market Overview — Hamilton Lane – explore.hamiltonlane.com
  An uptodate market overview, forecasting that evergreen funds could grow to represent 20 % of private markets within a decade.
• Global Private Markets Report 2025 — McKinsey & Company – McKinsey & Company
  A major industry report that highlights how fundraisers are exploring new vehicles (including evergreen structures) beyond traditional closed‑end formats.

Evergreen Investments by Merito Partners – How This Works?

Merito Partners began working with evergreen strategies in 2024. Since then, interest from our investors has grown quickly. Projects like Baltic Family Capital and Lignord Group show how evergreen structures can be used to build resilient, regionally rooted companies with stable cash flows and growth potential.

In the Baltics, this model is especially relevant. Traditional private equity funds sometimes buy excellent businesses but are forced to exit at the wrong time, often missing out on long-term value creation . With a smaller investor pool and fewer liquidity options in the region, this challenge is even stronger. Evergreen structures remove this pressure, letting value grow naturally. We focus on resilient businesses with clear competitive advantages such as:

• Stable, predictable cash flows
• Loyal clients and strong brand reputation
• Diversified revenue streams across markets
• Unique management or team expertise, with skin in the game
• Regulated or contractual income sources
• Tangible assets that provide security and options

By focusing on these businesses, Merito plans to build evergreen investments that withstand market cycles, pay reliable dividends, and grow in value over time.

We go further by combining evergreen structures with succession-driven opportunities:

• Many first-generation entrepreneurs in the Baltics are retiring and want trusted successors, often at fair entry prices;
• Some foreign investors are exiting due to geopolitical shifts, creating attractive local entry points.

Globally, evergreen funds typically target 8–12% net annual returns, depending on sector and strategy, with dividends often reinvested to boost compounding (Hamilton Lane, 2025). At Merito, we aim higher by combining evergreen structures with succession-driven opportunities, creating a model for premium long-term returns that offers investors steady income, growth, and the flexibility to stay invested in great businesses without the pressure of forced exits. At the same time, we are not — and will not be — opposed to opportunistic exits. While our focus is on long-term value creation, we manage each company in line with best private equity practices, ensuring they are always prepared for discussions with potential buyers should attractive opportunities arise.

New Evergreen Investment Opportunities: Wrapping up 2025

At Merito Partners, we are expanding our evergreen investment strategy into two new sectors with strong fundamentals and long-term growth potential. These opportunities are designed to combine stable cash flows with scalable expansion, creating resilient platforms for future value creation.

MeDi Group – Healthcare Services Consolidation

Healthcare remains one of the most critical industries in the Baltics, shaped by favorable trends such as an aging population, historically low spending, and consistent 7–9% annual market growth over the past decade. With an initial capital target of €5 million, MeDi Group will initiate consolidation of high cash-flow healthcare businesses across multiple verticals, through both M&A and greenfield investments.

The strategy aims to unlock significant upside through:

• Valuation multiple arbitrage;
• Centralized administrative functions;
• Professionalized business development and finance resources.

The project is targeting dividend generation from 2029 and a target net IRR of 15%+. The project is led by an experienced healthcare sector CEO investing significant personal capital, supported by a strong professional network. The first investment — a greenfield clinic with consultations, surgery, and inpatient facilities — is already underway, with a second transaction expected within 3–6 months. We plan to team up with doctors in each of our practice areas, ensuring long-term alignment.

Project Truffle – Baltic Agribusiness Buy-Out

Agribusiness continues to be one of the most resilient sectors, and Project Truffle focuses on acquiring the most efficient farming group in the Baltics. With an equity requirement of approximately €10 million, this leveraged buy-out is structured as an evergreen investment, facilitated by a leading Baltic investment bank.

The business is highly attractive:

• Favorable entry valuation with a valuable arable land portfolio included;
• A proven management team with decades of sector expertise and significant personal investment rolling over their stake in the business and co-investing alongside Merito;
• Strong free cash flow from day one, delivering double-digit net dividend yield, Large tangible asset base providing clear downside protection, complemented by rich recurring cash flows.

If you would like to learn more about our evergreen initiatives and stay updated on upcoming opportunities such as MeDi Tech and Project Truffle, please register your interest below. We look forward to building the next generation of resilient, long-term businesses together.

Click here to apply. 👋

Update No.15
July 2025

Greetings from Merito Partners

Real estate has long been regarded as a cornerstone of resilient investment strategy and at Merito Partners, we are elevating this asset class through a distinctive approach built on special situations, club deals and high-return strategies with sound risk management.

In this edition we share key insights from our market analysis, review of short-term hospitality in Riga, updates on our latest portfolio developments, and highight upcoming opportunities. We are also proud to introduce our two dedicated teams driving the execution of these projects.

Riga: A Hidden Gem in Europe

Recent economic trends show something that many smart investors are starting to see — Riga is one of the best places in the Baltics to invest in housing. Here’s why:

• Homes are more affordable in Riga than in other Baltic capitals. The average family in Riga can buy a home that is over 1.5 times bigger than what a family in Tallinn or Vilnius can afford.
• Mortgage loans are much smaller in Riga — about 60% lower than in other Baltic cities, even though loan conditions are similar.
• Wages are growing, interest rates are falling, and home prices are stable. This creates a good moment for buying property.
• There’s less competition. Fewer large developers are active in Riga compared to Tallinn and Vilnius.
• Riga is one of the few capital cities in Europe where a typical family can still buy a spacious home (over 90 m²), unlike in Western Europe, where homes have become less affordable.

These factors make Riga one of the most overlooked and — potentially most rewarding — real estate markets in the European Union.

Sources: Swedbank Macro Research – Baltic Housing Affordability Report (2024); Colliers Latvia; Comparethemarket.com – European Housing Affordability Data. https://www.swedbank-research.com/english/baltic_housing_affordability/2024/q4/hai_2024_q4_final.pdf

Short-Term Hospitality: The Best Use for Apartments in Riga’s Historic Centre

Recent trends clearly show that short-term rentals are becoming the most attractive way to use apartments in the centre of Riga. Here’s what makes this market so promising:

• Riga offers the best value in the region. Apartment prices are low, and rental returns are high compared to other nearby capitals.
• Riga was named the most affordable city in Europe for short trips in 2025 by the Financial Times.
• The number of short-term rental apartments has grown by 50% in the last 10 years. Around 2,500 units are active during peak season.
• Occupancy is solid at around 60%, and prices are still among the lowest in Europe — even lower than in cities like Bucharest and Chisinau.
• Global Airbnb trends show Riga could grow 5 times bigger, reaching up to EUR 50 million in yearly revenue.
• More professional operators are entering the market. Right now, only 25% of rentals are managed professionally, but service quality is quickly improving.
• New hotels are being built in Riga’s Old Town, which shows strong confidence from big players like Mogotel and AmberStone.
• Demand for serviced apartments is growing — especially from business travelers, military and embassy staff, and international students.
• Short-term rentals give owners more flexibility, allowing them to sell the property at any time, unlike long-term rental contracts.

All of this makes short-term rentals the smartest and most flexible way to use apartments in Riga’s city centre.

Strong Teams Driving Merito’s Real Estate Strategies

At Merito Partners, we believe that success comes from having the right people, clear goals, and strong responsibility. That’s why our real estate investments are not just about finding good opportunities — they are about putting the right experts in charge.

Our real estate platform, Merito Partners Real Estate Management AIFP, is built on two main strategies:

• Working with top developers through smart partnerships to build strong, market-ready projects.
• Finding hidden value in special situations, like old or underused buildings, and turning them into high-performing assets.

Each strategy is led by a dedicated team with the knowledge and motivation to get things done. This setup allows us to take on a wide range of projects — from improving city areas to creating more affordable housing — always aiming for strong returns for our investors and a positive impact on the cities we work in.

👉 Read here to meet the Team Behind Merito’s Real Estate Strategies

Case Studies: Merito in Action

We believe that results speak louder than words. In a dedicated article, we share the early outcomes of two of our real estate projects in Riga’s Old Town — Kaleju Street 18/20 and Pasta Street 6. These case studies reflect our approach to value creation through thoughtful upgrades, efficient operations, and careful planning.
If you’re interested in how we apply our strategy in practice, we invite you to take a closer look.

👉 Click here to read the full case studies.

New Investment Opportunities: Join the Next Chapter

Riga is becoming one of Europe’s top real estate markets — with strong fundamentals, good affordability, and low competition. At Merito Partners, we’re preparing new investment opportunities to match this momentum.

We offer focused club deals for 10–20 investors, combining equity and bank loans to fund high-return projects quickly. These deals move fast, so early interest is key.

• Deal size: EUR 2–5 million equity + debt
• Merito invests alongside you: at least 10% in every project
• Target returns: 20–30% net IRR

If you would like to be considered for future co-investment opportunities, you are welcome to submit your interest via our investor application form.

Click here to apply. 👋

We look forward to exploring new possibilities together.

UPDATE NO. 13
APRIL 2025

Greetings from Merito Partners

We’ve reached a key milestone: over EUR 100 million now trusted to Merito Partners by more than 170 private and institutional investors. In just 2.5 years, this trust has been built by offering a fresh and flexible approach to private equity in the Baltics — through 15+ tailored investment opportunities with strong returns and controlled risk. From funds and HoldCo to high-yield bonds, our investors value the range and quality of opportunities we deliver. Thank you to our investors and partners for trusting our vision. This milestone is just the beginning. There are many more ideas and projects in the pipeline that will be shared with you soon.

Mikus Janvars
Managing Partner & Co-Founder of Merito Partners

Should you be interested in joining our ever-growing investor base, don’t hesitate to reach out to investor.relations@meritopartners.com. 

Succesion-Driven Opportunities:

Unlocking the Next Wave of Investments in the Baltics

The Baltics are entering a new phase of succession-driven deals. With many first-generation entrepreneurs approaching retirement, ownership transitions are accelerating. At the same time, geopolitical shifts have led some international investors to exit, creating unprecedented opportunities for local capital. At Merito, we are capitalizing on this trend. We identify high-potential businesses at key transition points and open the door for our investors to participate early. We scout the market for the next wave of succession-driven opportunities.  We are eager to share two fresh investment cases where more than 40 investors have already committed over EUR 20M.

Baltic Family Capital (BFC)

Inspired by over 100 successful consolidators in Scandinavia (e.g., Visma, Indutrade, Lifco), BFC is the first permanent equity house designed for Baltic SME founders seeking a credible exit route. Using a buy-and-build strategy, BFC aims to create a EUR 100M revenue group by 2030, built from 2 to 4 platform companies and many decentralized businesses.

BFC targets resilient companies with high, stable margins, offering mission-critical products or services and serving diverse customer bases. Preferred sectors include business services, niche manufacturing, and value-add distribution, with EBITDA between EUR 500K and EUR 5M. 

BFC is led by Alex Prokofjevs — a true Baltic citizen (born in Lithuania, raised in Latvia, married to an Estonian) — and a dedicated team already actively mapping the market. Company plans to list within the next 5 years, opening new growth and liquidity opportunities for the investors.

Lignord Group

Lignord Group is the first Baltic consolidator focused on mid-sized sawmills — a core sector of the region’s traditional, export-driven wood processing industry. 

These businesses are often facing succession challenges, with founders nearing retirement age (average 60+), low investment appetite, outdated sales models, and a lack of digital adaptation and long-term strategy. At the same time, they offer robust access to raw materials, strong long-term client relations and high-quality asset base. Moreover, the market is deep with tens of companies fitting the description in Latvia alone.  

By consolidating 5–8 regional players, Lignord Group aims to create a strong group with professional management, focused on proactive sales, process digitalization, strategic financial planning, and unlocking synergies. 

Within 5 years, Lignord Group targets to become a stock exchange candidate, offering retail investors a chance to co-own a player in one of the Baltics’ most sustainable industries. 

We continue to seek similar succession-driven investment opportunities and are excited about the value these trends can unlock for our investors. We believe this is the momentum!  

Latvia`s Solar PV Champion:

Focus on operations and portfolio resilience

As many already know, this is one of our earliest projects. It is now fully developed, with 86 investors contributing EUR 20M in equity. Together with the bank financing, a total of EUR 44M was invested to develop 8 solar PV parks with a total capacity of 71.6 MW.

The project was completed in Q3 2024 and is now fully operational. In 2024, consolidated PV plant revenue exceeded EUR 2.2M and EBITDA was EUR 1.8M, in line with the budget given that some of the plants were commissioned during the year.

Given the strong performance and in line with initial plans, we started exploring the sale of the portfolio in the second half of 2024. While we received interest, negotiations have been slow—mainly due to geopolitical tensions, high interest rates, and uncertainty around the PPA market in the Baltics. The current conditions do not support a sale that would meet our investors’ expectations.

Meanwhile, a major shift has occurred in the market: the disconnection from the BRELL network has added uncertainty to the energy landscape but has also improved revenue projections for producers with existing capacity, including Merito and Saules Energy. The new situation has opened up an opportunity to increase long-term revenue potential and resilience of the portfolio by adding battery capacity. We are currently in discussions

Leading Self-Storage Operator in the Baltics:

BOX Storage Scaling

In 2023, Merito launched Merito Self Storage Fund with a clear mission — to build the leading self-storage operator in the Baltics. Just a year later, BOX Storage project has achieved impressive milestones and is building strong market momentum. 

The timing could not be better. In the Baltics, self-storage space per capita is around three times lower than the European average and more than five times lower than in the Nordics. Meanwhile, across Europe, the self-storage sector has shown consistent growth: rentable space has increased at a compounded annual growth rate of over 8% since 2015, with the number of facilities growing by 13%. Importantly, the sector is resilient — even through the market growth the occupancy rates have remained above 78% over the last eight years, showing strong and increasing demand. 

BOX Storage is positioned right at the center of this opportunity. By early June, we anticipate the opening of our flagship Go Planet location in Riga — offering over 4,000 m² of self-storage space. At the same time, we are finalizing our first locations in Vilnius and Tallinn. By then, BOX Storage’s operational network will cover six prime locations across the Baltics, offering over 12,000 m2 of leasable self-storage space across the Baltics. 

But this is just the beginning. By the end of the year, we plan to add up to four more locations, expanding our footprint to approximately 30,000 m² of rentable space. This will complete the establishment phase and mark the start of a new stage — active marketing and client acquisition.

Our growth strategy combines the transformation of underused spaces with targeted M&A deals. The Baltic self-storage market remains significantly underserved, and we see a clear path toward consolidation, value creation, and eventual exit, whether through a strategic sale or a potential listing. 

What makes us confident about this project?

• Low-risk profile: The real estate we acquire typically holds market value exceeding acquisition cost, providing strong downside protection. 
• Experienced team: Our management team brings proven experience in scaling operations and delivering results. 
• Multiple growth levers: We are growing organically by converting spaces and through smart acquisitions. 
• Attractive industry dynamics: Self-storage valuations are compelling, supported by strong demand, stable cash flows, and multiple exit scenarios. 
• Future-ready model: We are committed to sustainable principles and leverage tech-driven solutions for efficiency and better customer experience. 

Investors still have a window to join the BOX Storage journey as we continue raising investments through the summer. With clear market leadership within reach and a platform built for long-term value creation, BOX Storage is set to become the undisputed self-storage champion of the Baltics. 

Welcome to Go Planet BOX Storage opening

Save the Date – May 27

We’re excited to invite you to the kickoff event for our Merito Self-Storage Fund flagship location – Go Planet, at Gunāra Astras Street 2B, Rīga. This will be the largest and most advanced self-storage facility in the region, setting a new standard for the market. We’d be glad to have you join us for this milestone celebration.

First Liquidity Event Confirmed:

Adaptive Media Sets the Stage for Target Fund II Investors

2025 is shaping up to be a milestone year for Target Fund II investors. We are pleased to announce the first liquidity event from our investment in Adaptive Media, marking a major achievement for the Fund.

In 2024, Target Fund II raised EUR 4.3M in capital and acquired a 74% stake in Adaptive Media SIA.

Adaptive Media’s strong financial performance drives this momentum. The company closed 2024 with a consolidated net profit of EUR 1.26M — a 26% increase compared to 2023. Growth was fueled by a significant expansion of gross profit in key markets, including France, Spain, Romania, Brazil, and Mexico, with most of these markets more than doubling their gross profit year-over-year.

These results validate our investment approach: acquiring businesses with solid fundamentals, enhancing operational efficiency, and accelerating international growth.

Importantly, the first regular dividends for all shareholders are expected to be paid already in Q2 2025 — a major step towards delivering early and consistent liquidity to our investors.

Special Real Estate Investments:

Finalizing Restructurings and Exploring Exit Opportunities
We continue working dynamically across our real estate projects, pushing through restructurings, optimizing operations, and carefully reviewing different exit scenarios to unlock value for our investors.

Kaleju Street 18/20 – Riga Old Town
At our residential property on Kaleju Street, the focus is on completing renovation and furnishing works ahead of the summer high season. Four rental units are currently under construction, and the last long-term tenants are preparing to vacate soon.
Our goal is clear: maximize the building’s rental potential and optimize running costs during the most active rental period. In parallel, we have initiated exit discussions (building sale) and are carefully reviewing all available options to ensure the best outcome.

Pasta Street 6 – Riga Old Town
At our second residential project on Pasta Street, commissioning is in its final stages. We are preparing to launch 86 fully furnished, ready-to-rent units into the high-season short-term rental market.
Once operations are fully underway, we will start evaluating and processing different exit opportunities. The strategy is to capture the strong market momentum and deliver a well-timed exit once the building’s revenue potential is fully demonstrated.

Ulmaņa Gatve 2 – Riga Industrial Asset
At our industrial property on Ulmaņa Gatve, work continues to optimize cash flow and strengthen the tenant mix. We are actively renewing agreements with existing tenants and onboarding new ones to improve cash flow stability.
In parallel, we are preparing several development and renovation scenarios, including sketches, cost estimates, and potential project roadmaps. The upcoming quarter will be focused on selecting the optimal value-creation path and preparing the building for its next development stage.

Across all properties, the main objective remains the same: move fast, drive operational improvements, and explore the best exit scenarios to deliver strong results for our investors.

We are actively working to prepare new real estate investment opportunities for our investors.