Financing for Research & Development 14 th December 2006, Brussels.
-
Upload
calvin-maxwell -
Category
Documents
-
view
217 -
download
0
Transcript of Financing for Research & Development 14 th December 2006, Brussels.
2
EIF at a glance
Specialised European institution for SMEs
Established 1994 Operational platform acting through
Venture Capital, Guarantees for SME portfolios and financial
engineering
• AAA Rating
Standard & Poor’s: AAA
Moody’s: AaaFitch: AAA
• MDB status 0% weighting
• Shareholders
EIB, EU, Financial institutions
• Portfolio
EUR 14bn (600 000 SMEs)
3
Resources and objectives
BMWA - ERP
Dahlia SICAR S.R.
European Community
EUR 600m+ Capital increase EUR 4bn
Revolvin
g
EUR 450m (MAP)
EUR 1.1bn (CIP)
Up to EUR 1bn
To be committed to venture capital funds and financial institutions (eg: guarantees)
SMEs
4
EIF assets under management (at 30/09/06)
EUR 940m
EUR 490m
New commitments (1 January 2006-30 September 2006)
180banks/
guarantee institutio
ns
EUR 10.3bnGUARANTEES
EUR 14bnTOTAL
240 funds
EUR 3.7bnVENTURE CAPITAL
Vehicles
Total commitments
EUR 450m
5
Key investor in major markets
Niche opportunity player in smaller markets
Geographic spread• Balance portfolio
between expansion capital and start-up / early stage
• Portfolio biased towards technology (65% in ICT & life
sciences) • Around 30% of portfolio
in multi-country funds• Track record in
backing new teams in Central and Eastern Europe
Multi-country
29%
Italy
7%German
y
8% Spain
7%
France
15%United Kingdom
15%
Rest Western Europe
14%
Central and Eastern Europe
5%
Venture capital: portfolio of EUR 3.7bn (at 30/09/06)
6
Private Equity Stage Distribution by % of Amount Invested
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2001 2002 2003 2004 2005
Buyout Replacement Capital Expansion Start-up Seed
2005 European Private Equity SurveyConducted by Thomson Financial and PricewaterhouseCoopers on behalf of EVCA
7
EIF’s experience as a fund-of-VC funds
• High risk; very qualified management teams needed with all relevant skills (Investment , monitoring and exit)
• Critical mass requirements
• Good VC fund governance (independence of managers vs. investors, transparency, etc.)
• Balance public/ private investors? Optimise the use of public funding, fight for efficiency and quality
• Proximity of “technological clusters” (Heidelberg, Cambridge, Finland, etc…) very important esp for seed-early stage
• Focus on market gaps
more than money !
8
1.Mixed results of tech transfer initiatives
• Many universities struggling - technology transfer not their mission
• Most universities do not have the means to hire professionals with industry background having the right skill set
• Incubators have a mixed record at best
• Many initiatives are sub-scale
2. Venture often more suited to grow business rather than seed them
• Larger deals more attractive
• Milestone driven approach vs. need for flexibility
• Fixed life time of funds
Inefficiency in Tech Transfer is a major issue for the seed funding gap
9
• High Growth Innovative Companies Schemeo Early and expansion stage VC fundso Co-investments in side-funds with business angelso Eco-Tech equity window
• SME Guarantee Facility
o SME loan guarantees
o Micro-credit guarantees
o Mezzanine guarantees
o SME loan securitisation
• Capacity Building Scheme (Seed Capital Action and partnership with international finance institutions)
Budgetary envelope: EUR 1.1bn (2007-2013)
Competitiveness & Innovation Framework Programme (CIP)
EIF responsible for the financial instrumentsof the Entrepreneurship and Innovation Programme:
10
JEREMIE draws lessons from the past …
• Under utilisation of financial engineering
instruments in Cohesion Policy
• Grant approach ≠ revolving character
• Difficulties in implementation
(regulation, time frame, procedures, expertise)
11
JEREMIE: The System
Venture CapitalFunds
Preparation of
Operational Programmes
EVALUATION PHASE
2006 2007 - 2015
IMPLEMENTATION OF HOLDING FUNDS
DISBURSEMENT PROCESS
MicrofinanceProviders(MCPs)
Tech TransferActivities
Guarantee schemes
Transforming parts of the ERDF grantsinto financial products for SME
(Lending of national contribution by EIB possible)
SMESMEs
SMESMEs
SMESMEs
SMESMEs
SMESMEs
12
JEREMIE or not JEREMIE?
No JEREMIEJEREMIE
SME Access to Finance
• Interim Payment • Delegation Expertise• Use of Market-driven revolving
instruments/flexibility, (after 2015!)
• Management and administration assumed by Fund Manager
• Lisbon earmarking• Portfolio approach
• Time delays• Less flexibility• Fragmentation/case by case
approach= Less impact in the regions
European Investment Fund
EIF43, avenue J. F. Kennedy L-2968 Luxembourg
Tel.: (00 352) 42 66 88 1