Europe’s Leading Developer of Risk Financing for Entrepreneurship & Innovation
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Transcript of Europe’s Leading Developer of Risk Financing for Entrepreneurship & Innovation
Europe’s Leading Developer of Risk Financing for Entrepreneurship
&Innovation
This presentation was prepared by EIF. The information included in this presentation is based on figures available for March 2011Any estimates and projections contained herein involve significant elements of subjective judgment and analysis, which may or may not be correct.
European Investment FundC
IP
CIP
19 October 2011
Innovation Norway
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Agenda
•Introduction EIF
•Venture Capital Fund investments – main principles
•Competitiveness and Innovation Framework Programme
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EIF at a Glance
Dual Objective of Meeting EU Policy Goals & Generating a Satisfactory Return on Equity
EU specialised institution for SMEs, risk financingVenture Capital and Mezzanine (fund of funds)Structuring and Guaranteeing portfolios of SME and microfinance loans/leases
Authorised Capital € 3bn EIB: 62%EU: 30%Fin. institutions: 8%
Geographic Focus /IntermediariesEU 27, EFTA, Candidate CountriesDistributing through Banks and Funds
AAA ratedStaffing, Culture and Values
Leading-edge modern institution
Adapting to changing market conditions
Attracting talented staff
High standards of compliance and integrity
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EIF’s Shareholders
EIB: Main shareholder (62%) European Investment Bank’s shareholders: 27 EU
Member States
European Community represented by the European Commission (30%)
25 public and private financial institutions from 17 countries (8%)including:
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Operating Model of EIF
VALUE ADDED
Own resources
EIB (RCM, MEZ)
EC (CIP)MA
(JEREMIE)MS (ERP) Funds of
Funds Regional
(LfA)
Product Development
Mandate Management
Transaction Execution
Risk Management
Follow-up & Relationship Focus
Commercial Banks
Development & Promotional Banks
Guarantee Institutions
Fund Managers
SMEs
Suppliers / Mandators
Transformational
Key Success Factors
Intermediaries
Transformational Role of EIF
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Vision & Medium Term Strategy
7 Key Objectives
Maximise impact on the smart, sustainable and inclusive growth of medium, small and micro enterprises in the EU Accession and EFTA Countries
Cornerstone European Growth and Venture Capital and catalyse a maximum level of new SME financing
Leverage own capital and mandator’s risk capacity to catalyse EUR 10bn to 13bn Equity, Mezzanine and Debt annually
Generate EUR 70-80m operating profit at 40 – 45% cost to income and at a long run ROE of 5 to 6%
Establish value creating Risk Management – AAA rating
Build integrated, stable, scaleable systems and processes
Promote and enhance an excellent internal and external reputation
Europe’s leading developer of risk financing for entrepreneurship and innovation
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Agenda
•Introduction EIF
•Venture Capital Fund investments – main principles
•Competitiveness and Innovation Framework Programme
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VENTURE CAPITAL
PRIVATE EQUITY
StockExchange/PublicEquity
EIF INVESTMENT FOCUS
Later-stageBuy-out
Mid-Market
ExpansionDevelop-mentCapital
EarlyStage
SeedStage
Business Angels, Side Funds,Pre-Seed
TechTransfer/Incubators
The PE/VC Market Covered by EIF
INNOVATION
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Technology Transfer - Converting Research into Products for the Market
MarketUniversity / Research
OrganisationSpin-out
Licensing
Collaboration (contract research,…)
IP / Idea
“technology IP”
“prototype IP”
R&D
Technology Transfer
Marketable Product
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Since 2005, EIF has been able to invest resources to understand Tech Transfer, to create awareness and to develop new TT initiatives with leading research universities
Focus is on research organisations which are leaders in their respective fields and act in an entrepreneurial environment
Accelerated process through framework agreements (covering issues such as company valuations, shareholder structure,…)
Several transactions already, in which EIF has had a key role Chalmers Innovation
Leuven CD3
UMIP Premier fund with Manchester University
IP Venture fund UK
Karolinska Development Co-Investment Fund
EIF's Tech Transfer Improves the Commercialisation of Research
Provider of Innovative Solutions to VC Constraints
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Core activity in venture with commitment to growth and lower mid-market.
Focus on cutting-edge technology in Venture portfolio (55% in ICT and Life Sciences)
First mover in Europe's emerging markets and new market segments (cleantech)
Venture and Growth Overview
Key Investor in Major MarketsIncreased Finance to Support less Developed Markets
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As Primary FoFs investor Biggest Fund-of-Funds investing in European
Venture Capital Repeat cornerstone investor in top quartile
teams in Europe Catalytic role through recognised
thoroughness of its due diligence process
Backing first time funds managed by tomorrow’s top quartile teams
Primary Fund-of-Funds Investor
Long-term Relationship with best GPs in Europe
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Ven
ture
& G
row
th C
ap
ital P
ortfo
lio€5.4 bn Net Equity Commitments across Europe at 31.12.2010
Austria 54Belgium 83Bulgaria 13Cyprus 7Czech Republic 28Denmark 95Estonia 7Finland 115France 768Germany 558Greece 15Hungary 16Ireland 89Italy 267Latvia 36
EU 27
EFTA/EEA
EU Candidate Countries
Lithuania 40Luxembourg 21Malta 8Netherlands 109Norway 20Poland 92Portugal 155Romania 36Slovakia 4Spain 424Sweden 280Switzerland 81Turkey 274United Kingdom 1306Other & Non EU 361
EUR m
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Few EIF VC investments made in Norway so far
RCM
Northzone VI
CIP
Guarantee to Cultura Sparbanken
…but several investments made in Norwegian companies through EIF funded funds
A total of EUR 110m invested in 22 companies since 1999
Examples include AppearTV, It’s Learning, EnergyMicro, ClavisPharma, Wright, Green Energy Group
…and one board approval for CIP – Procom Capital
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Agenda
•Introduction EIF
•Venture Capital Fund investments – main principles
•Competitiveness and Innovation Framework Programme
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Competitiveness & Innovation Framework Programme (CIP)
Purpose
Encourage the competitiveness of European enterprises
Support innovation and entrepreneurship activities
Provide better access to finance
Promote the increased use of renewable energies and energy efficiency
The European Commission has mandated the management of the CIP financial instruments to EIF
CIP budget - total envelope for VC : € 550m to be invested over a period 2007-2013
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22 DEALS SIGNED to date for over € 270m
Competitiveness & Innovation Framework Programme (CIP) GIF Investments
360 Capital One 3T Telecom Technologies Transfert Albuquerque FCR Baltcap Private Equity FundBullnet Capital IICape Regione SicilianaCapricorn Cleantech FundChalmers Innovation FundConor Technology Fund IICreathor Venture Fund IIIDemeter Fund IIDritte SHS Technologie GmbH & Co. KGFountain Healthcare Partners Fund IHPE PRO Institutional Fund Inventure Fund Ky (ex Holtron)Newion Investments IINorthCap IVS IIIPentech Fund IIPinova Fund ISerena CapitalUMIP-MTI TTA FundWHEB Ventures Private Equity Fund II
Countries covered by CIP GIF and targeted by the agreements signed
Other countries covered by CIP G GIF but where no agreements have been signed to date
Other countries and territories
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CIP Investment Criteria – Venture Capital (1) Focus on early (seed and start-up) to expansion stage
At least 50% of fund to be invested in innovative SMEs
SMEs to be defined according to the European Commission Recommendation 2003/361 of 6 May 2003 as enterprises which prior to first investment
(i) have less than 250 employees; and
(ii) according to the most recent balance sheet show either (a) an annual turnover not exceeding EUR 50m or (b) an aggregate balance sheet not exceeding EUR 43m; and
(iii) conform to the criterion of being an “autonomous enterprise” as defined in the above-mentioned Recommendation.
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CIP Investment Criteria – Venture Capital (2)
Independent fund managers
Ownership / control of management company
Independence of investment decisions
Market-oriented investor base
Minimum 50% (without counting the CIP investment)
Pari passu principle to apply for all investors
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Contact
European Investment Fund
96 boulevard Konrad Adenauer
L-2968 Luxembourg
Tel.: (+352) 42 66 881
Fax: (+352) 42 66 88 200
www.eif.org