European Investment Fund - Birthe Bruhn-Léon Head of Mandate Management docx

institutions: 9% Including KfW, CDC, Barclays, Intesa Geographic Focus / Intermediaries EU 27, EFTA, Candidate Countries Distributing through Banks and Funds AAA rated – stable outlook G

European Investment

Fund

Birthe Bruhn-Léon

Head of Mandate Management

EU specialised institution for financing SMEs

Statutory Objective to ‘Contribute to the pursuit

of Community objectives, and ‘…to generate

an appropriate return on resources’

Value added and impact focused

Authorised Capital

€ 3bn

EIB: 61%

EU: 30%

28 Fin institutions: 9% Including KfW, CDC, Barclays, Intesa

Geographic Focus / Intermediaries

EU 27, EFTA, Candidate Countries Distributing through Banks and Funds

AAA rated – stable outlook Governance

Board of 7 ( 4 EIB, 2 EC , 1 FinInst)

acting independently

EIF at a Glance

EIF Tool Kit for SMEs

SME Development Stages

Private equity funds

Microcredit providers Business angels Technology transfer institutions

Guarantees & credit enhancement institutions

VC seed & early stage funds

GIF Equity instrument 2007-2013 – to date

Committed budget for 2007-2013:

c EUR 550m

EU

Invests in own name and at risk and on behalf of EU under GIF

EUR 330m signed

EIF

Incentivised to invest in tech start ups and early/

expansion stage SME;

Catalyse co-investment 28

VC funds

VC funds

Tech start up/early and expansion stage SME benefit from access to equity finance

202 SME

Final beneficiaries

Investee multiplier: min 10x

Fund Leverage: c 5x

To date, 67

equity funds

supported over

past 15 years

with

EUR 690m

investments

catalysing 5x at

fund level

Equity instrument 2014-2020

 Continuity of public support with critical mass through a fourth generation of EU instrument particularly important in current market situation

 Persisting market failure for pre seed, seed and early stage ventures, but also in expansion and growth stages

Volumes of EU equity mandates

vs Total VC funding

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

Total venture funds raised

Equity instrument 2014-2020 – ctd.

 Further impact potential through:

 New stages: technology transfer and other pre-SME financing

 New investors: e.g business angel co-investing

 New delivery forms: implementation through mandate and/or partnership model (fund of funds)

 Additional funds: Re-use of reflows across instrument generations?

SMEG Guarantee instrument 2007-2013

- to date

Committed budget for 2007-2013:

c EUR 506m

EU

Extends guarantees:

• Loan portfolio guarantees

• Microcredit guarantees

• Equity guarantees

• Securitisations

EUR 376m

EIF

Incentivised to build up loan portfolios

49 agreements with 38 intermediaries

Guarantee institutions, promotional banks, banks

SME benefit from access

to loan finance

190k loans to 170k SME

SME

To date, about

600,000 SME

given access to

finance under

122 guarantee

agreements for

nearly EUR

850m guarantee

commitments

under the three

EU programs

since 1998

Guarantee instruments 2014-2020

 Loan Guarantee Facility

 Counterguarantees targeted at guarantee institutions

 Loan guarantees targeted at public/private financial

institutions (FI) for SME lending

 Securitisation window

 Guarantee products tailored to intermediary needs

 RSI-II Facility

 Targeted at defined R&D and innovation-intensive SME and small mid caps (up to 500 employees)

 Intermediaries: private and public financial institutions conducting lending/lease activities

Ex CIP-type guarantee

RSI – EIF EU-wide portfolio of

new SME loans

Risk retained by the (FI)

EIF guarantee

EU guarantee

Expectations for Financial Instruments

 High EU Added Value through the targets, product and/or implementation form

 Targeted programs, but not too narrow (critical mass and impact potential)

 Flexible segmentation of windows targeted at different intermediaries and different products (adaptability to market; countercyclical role for VC)

 Geographic diversification as a function of the other targets

 Use EU budget in best possible catalytic manner: sometimes higher risk taking

 Operational implementation delegated to entrusted entity