By far the most common question we get from investors going from first to second fund is what have we learned. A lot. We spent a lot of time together before launching our first fund to determine what investments we collectively like versus what does and does not work investing in the Baltic region. By and large we have stuck to our original principles. We choose to work with companies targeting a large market. We choose to work with people who we feel we can help in the journey of achieving really big things. Sticking to the convictions has helped us get comfortable with various forms of risk. And there is still a lot to learn. Baltic economic composition continues to change, the very least through technology. Fortunately, Livonia maintains a flexible investment mandate for majority or minority ownerships, investment sizes, and industry selection. We are grateful for our investors for that.
We have had many opportunities to expand on our fund strategy, set up separate fund paths. While we appreciate these approaches of often very interesting propositions and people, we have kept to what we feel is our core strength – private equity. The market is large for us and leadership as an institutional private equity fund not established. We are the next generation, we work harder. Today there are still significant funding gaps in the market which we hope to help fill. My partner Rain Lõhmus was part of creating the local banking and pension systems. Both ended up successfully transformed as industries. We are strong believers in a similar outcome for the Baltic investment management market.
In the last half decade, the world changed more dramatically about climate awareness than it did in the previous periods. Private equity’s role in that is something we take very seriously. While our first portfolio already exhibited a number of world-class environment-forward companies such as Freor, Thermory, and Cgates, we are taking a step further with our next fund. We pledge to invest in environmental and related causes an amount equal to 10% of our fund size. We are changing our approach from the beginning of the investment and look to champion environmental leadership in our companies. Credibility of such an environmental pledge beyond monitoring was an important aim for us. We feel like we are on course to achieve that.
We are inspired by our entrepreneurs and by our team. Whether it is the product-based passion of people at Thermory to create a global thermowood leader or industry-leadership at Freor filling capacity at the newly built facility and soon perhaps needing another one. We try to support the growth of Scoro software solution to penetrate the globe as much as we help Fenestra and Klaasimeister establish geographic leadership. We work in tandem to make sure that at our finish point, everyone involved can be satisfied with the outcome. We at Livonia are a small team and aim to keep it that way. It works for us.