The Prime Fund Group is fundamentally concerned with investments in innovation. For investors, the Prime Fund SICAV Qualified Investors Fund is intended mainly for investors, targeting already existing projects.

FOND SHOP asked Dusan Moskaliev and Jan Svoboda from Prime Fund Group not only what this newly formed group belongs to, but we also made sure what kind of investment style they apply or how other investors can participate in their projects.

Do you need to introduce the investment group Prime Fund? When did you come into being, what is your main message?

The Prime Fund Group has been operating in full since the summer spring. There is a very clear consensus that we will get killed by investment in innovation. Apart from traditional investment companies, we do not have a defined concrete area to sympathize with.

We support companies from very diverse fields. The key is to have them come with the least amount of flexibility that shifts the ability of the driver, and ideally supports sustainability or some other value in the ESG framework. When we find such a project — even if it is in an advanced or advanced phase — we want to accompany it with investment as much as possible.

Our goal is not to quickly evaluate the invested company and sell it. We are much more likely to take a slower, but more permanent way. In the position of the main investors, we will accompany the company from the (pre) seed phase to expansion into world markets.

On the website, investors can find out that there are currently “two funds that are symbiotically linked” in the quote. The first is PRIME FUND Lab, which you write about, which is the founder's private investment fund. Does this mean that it is a closed fund, what is its purpose?

It's like that. The Prime Fund Group has doors that complement each other perfectly, but at the same time they are not dependent on themselves. The aforementioned Prime Fund Lab is our private investment project.

His international help to launch innovative companies in the (pre) seed phase. The aim is to anchor companies in the market, to help them to set up their processes efficiently and to push them into further investment phases, even as well as the way to market expansion. There are quite different risks on the distribution from Prime Fund SICAV, which is why we take them completely upon ourselves.

On the contrary, PRIME FUND SICAV, or sub-fund PRIME FUND Tech, is a fund of qualified investors. So what is the strategy of this fund- du and how do the two funds follow each other?

Prime Fund SICAV is the second member of our group. The aim is to develop a company that has a working product, a stable financial base and an unmistakable ambition (and potential) to conquer competitive markets. Ideally in the whole world.

Prime Fund SICAV is completely non-native to Prime Fund Lab. It is also based on it, but it follows directly. When all our investor instinct is confirmed and the company we invested in Prime Fund Lab successfully establishes itself in the market, we will take the opportunity to join the Prime Fund SICAV. If we agree (this is not an obligation), the company will be contacted by qualified investors in the first instance.

However, this does not mean that the path to the Prime Fund SICAV would lead only from the Prime Fund Lab. If some project meets the relevant parameters and passes our selection process, we can directly assign it to the SICAV Prime Fund.

We count 100% of quantity in SICAV Prime Fund for quality. Therefore, the number of invested projects will be disrupted very slowly. It is estimated that we are close to securing almost every four, possibly successful companies, with whom we will meet. And even the next one takes us, in some cases even years, we do not pay for good. However, the first projects invested show that this strategy is effective.

Can you describe some concrete investments of the fund? The press has been writing about Foxdeli startup...

The Foxdeli platform, which is used by a large number of domestic and Slovak e-shops for upfront marketing, is one of our flagships. It perfectly illustrates the synergy between Prime Fund Lab and Prime Fund SICAV.

For the first time, all of us invested in Foxdeli in 2021, in the framework of a private investment project. Within two years, the company grew and generated hundreds of payers. This year, you have decided to bring it to SICAV's Prime Fund and support expansion into other markets.

We recently managed to connect Foxdeli to the world's leading e-commerce platform, Shopify, by opening the door to the drop. In the first phase, we will test selected European markets and from next year we will start preparing for the conquest of America.

You realize that Foxdeli is just one of your flagship ships. Do you have any other?

ETW is also doing well. It is quite possible that in the future this company will become the answer to the big question “What about plastic waste? “

ETW has also developed an advanced method for cutting even the most toxic plastics into granules, which are then used to produce new packaging. And it's not just a theory, for two years now the company has been operating a factory that recycles plastic waste into a recyclable source.

ETW has recently moved a report from the Czech company to another recycling line. Therefore, the Czech possibility of this project is the same as ours, because it is a wonderful preparation.

By the way, within the framework of the Prime Fund Group we support not only synergies between Prime Fund Lab and Prime Fund SICAV, but also between individual invested projects. This is also the case of Foxdeli and ETW.

On the one hand, we have a project that cooperates with the most popular e-shops in our country, and one of the biggest problems of all e-shops is packaging. On the other side, we have a company, which packaging material can be converted into a recyclable resource.

Thus, the cooperation of these companies can be a win-win situation and move the development of both projects to a new level. In fact, the search for such interconnection lines is one of the driving engines for us.

If someone decides to invest in PRIME FUND SICAV, how much is this minimum investment, what is the subscription period, the liquidity of the fund and, of course, what many investors secure the most, that is, what are the fees?

The minimum investment is CZK 1 million, while the entrance fee varies between 0% and 5%. The subscription period and liquidity are up to us.

Graduation fees are graded according to the size of the investment. From the tax point of view, three-year and long-term investments are the most appropriate.

After three years, the exit fees are zero. For short investments, they are graduated. For repurchases within one year, the maximum is 50%, between the first and second years it is up to 40% and between the second year and the maximum is 30% between the second year and the third year.

You mentioned, and it is also particularly accentuated on the web, that the essential component of the entire investment process is ESG. So how do you approach the theme of sustainable investing?

Our goal is to release them — which is why we hired the investment group. But by the way, we want it all to go deeper. To support the development of meaningful projects with our investments.

The kind that make the world around us better. In addition, whether it will be sustainable or that it will be supported in a society of equal opportunity. That's why we invest in innovation that concerns the ESG area.

And so that it's not just a matter of interest, we are working on a methodology that will enable us to measure ESG in concrete terms in the future — both for the fund itself and for its assets. For each investment, we should therefore be able to provide information in the future on how the project will affect the planet or society.

Sustainable investing and ESG are not only “controversial issues” in the Czech Republic, not everyone agrees with them. Are you worried that this might deter some investors?

On the contrary. It is a general trend that is strengthening and will be strengthened. We can see this, for example, in the fact that banks are now more involved in financing ESG projects. Moreover, there is also the justified support of ETW by the Czech Government.

In addition, our entire summer year confirms that we have gone through a rough patch. For example, many things happened to us that we established our investment group somewhere and the listeners were so excited that they wanted to get involved immediately.

Paradoxically, a number of people have shown the greatest interest in investing in the Prime Fund Lab framework — despite our insistence that we will not bite foreign investors into this project today. The idea of investing in something meaningful was so attractive to him that they were willing to take even the most extraordinary risks. However, we must insist that this project is private.

At the beginning, if your investor asked, why should I invest in your fund, what would you say at the door, through the years?

You can invest in a lot of things, but only a few investments make a lot of sense. We didn't want to choose between good business and meaningful. We believe that these two worlds do not have to be separated. Investing in our projects, so qualified investors can support what will provide them with a secure benefit and, once enough, improve the life of their child or grandchild.

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