Hodgson Martin, the Edinburgh-based manager of New Europe Insurance Ventures (NEIV), in late summer said that the fund, together with the European Bank for Reconstruction and Development (EBRD), had invested $2 million (ecu 1.7 million) for a 30% holding in Nordika Insurance, the fourth largest insurance company in Estonia.
Subject to Nordika’s performance in the 12 months following the investment, NEIV and the EBRD may inject $1 million in follow-on funding next summer.
Despite the difficulties currently facing Estonia’s financial sector, Nordika “has an exciting opportunity to increase its market share”, according to Hodgson Martin managing director Allan Hodgson.
The Nordika deal was EBRD’s first investment in an Estonian insurer. Jonathan Harfield, co-head of the bank’s Tallinn office, said the transaction “demonstrates the EBRD’s continuing commitment to the country’s financial sector”.