0 europe’s leading developer of risk financing for entrepreneurship & innovation this...
TRANSCRIPT
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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
Fund
Graham CopeHead of Region, Northern Europe
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European Investment Fund’s Role
The Nordic Innovation Fund Proposal
Key advantages
Next Steps
Supporting Information
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Agenda
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EUR 5.4bn net commitments to Private Equity and Venture Capital funds at end 2010
As Primary FoFs investor (over 300 funds) Biggest Fund-of-Funds investing in
European VC Repeat cornerstone investor in top quartile
teams in Europe Catalytic role through recognised
thoroughness
and quality of its due diligence process Significant Nordic portfolio and experience
EIF’s role: Primary Fund-of-Funds Investor
Long-term Relationship with best GPs in Europe
4 Public Private Leveraging of EIF Capacity and Experience
EIF’s views on the Nordic market
The Nordic market is one of the most mature in Europe
EIF has strong record of investments across the region
Deep technology leadership available in several segments, e.g. Cleantech, Life Sciences, ICT/Mobile
High quality university and research institutions
Recent success stories such as e.g. QlikTech, Skype and Spotify, raises the awareness of international investors
Timing is right. European Commission and EIB Group ready to do more as market needs become urgent
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A number of studies have highlighted the declining level of equity investment in growth-focussed companies across the Nordic region*
A significant number of Fund Managers have withdrawn from the sector or simply closed operations
Financial turmoil has decreased the private markets level of interest and courage to engage in earlier stage equity investments
The region’s leadership qualities in Cleantech, Life Sciences and ICT/Mobile sectors may become starved of the risk financing that it needs, putting at risk future growth opportunities
The problem for the Nordic Region
*Nordic Venture Capital: Cross Border Investments – Menon Business Economics December 2010Nordic Baltic Investment Funds – EIF and Nordic Investment Solutions November 2009
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ERP Germany (launched in 2004) Co-investment 50/50: EIF/ERP (German Ministry BMWi) Size: € 1bn - € 642m committed in 20 funds
LfA-EIF GermanyCo-investment Bavarian Ministry of Economics LfA Förderbank, Bayern EIF. Size € 50m - € 26m committed in 4 funds
NEOTEC: Spanish Technology Fund-of-Funds Tech fund in partnership with CDTI (TMT, ICT, clean-tech, bio-tech and LS) Size: € 183m - € 117m in 11 Funds and Co-investment Agreements
Istanbul Venture Capital Initiative Turkish generalist VC investment vehicle for institutional investors Size: € 160m - 2 funds signed for a total of € 21m
Portuguese Venture Capital InitiativeGeneralists funds, ICT, Life Sciences, Healthcare, Environmental & Energy Technology Size: € 111m – 2 transactions signed for a total of € 30m
Dahlia: Pan-European Fund-of-Funds Joint initiative between EIF and Natixis Private Equity (NPE) Size: € 300m - over 60% of Dahlia funding has now been committed
UKFTF: UK technology Fund-of-FundsLaunched by the UK government and advised by EIF Size: £200m at first closing to be invested in Funds targeting UK start-ups and
growth businesses in the high tech sector – 3 investments signed for £28m
Public Private Leveraging of EIF Capacity and Experience
EIF as Manager of National Funds-of-Funds
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EIF discussion partnersSweden
Industrifonden
Innovationsbron
Ministry of Enterprise, Energy & Communications
Ministry of Financial Markets
Tillvaxtverket (Economic Development Agency)
Swedish Venture Capital Association
IVA in Sweden (Innovation Academy)
Finland
Finnvera Venture Capital (formerly VeraVentures)
Finnish Industry Investment
Finnish Venture Capital Association
Ministry of Employment and the Economy
Norway
Argentum
Innovation Norway
Ministry of Industry and Trade
Norwegian Venture Capital Association
Denmark
Vaekstfonden
Ministry of Economic & Business Affairs
Iceland
NSA (New Business Venture Fund)
Ministry of Industry, Energy and Tourism
Plus many market players through conferences and meetings – not a single
negative voice
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Develop an implementable structure that addresses the continued market deficiencies in the provision of equity capital to the regions innovative growth companies
Catalyse a process that stimulates and maximises the engagement of private capital in this growth-creating sector
Create a funding mechanism that boosts the ‘Green growth’ opportunity and positioning that the Nordic region currently enjoys
Utilize EIF’s experience*, capital and reputation to create a dedicated vehicle that employs the best market practices and disciplines
Put simply, EIF believes its raison d’etre is to address the highlighted problems through proven mechanisms and in partnership with the Nordic governments
EIF’s objectives
*EIF currently manages 7 different Fund of Funds structures in partnership with member States across Europe. The committed capital exceeds EUR 2.1 billion and has invested into over 50 different funds.
9 Public Private Leveraging of EIF Capacity and Experience
EIF’s proposed Nordic Innovation Fund
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The Tool box
Fund of Funds: 3 major themes: ICT with focus on mobile technologies, Life Sciences with focus on Biotech and Medtech, and Cleantech with focus on Renewable Energy and Energy Efficiency. Objective: active involvement of corporates/strategic investors in the VC ecosystem;
Co-Investment Facility: about 70% of seed and start-up investments in innovative technology companies are estimated to be done by non- institutionalised investors such as business angels, family offices and corporate venture arms. This instrument will leverage these investors by providing them with co-investment capacity;
Technology Transfer Accelerator: investments in technology transfer structures to enhance efficiency and support pre company creation/pre-seed structures from university and research institutions.
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The Nordic Innovation Fund will:-
Create a significantly important level of risk financing targetting the key sectors of prosperity for the future of the Nordic Region;
Address the negative market trends of reduced investment levels and departing fund managers;
Deliver an implementable structure that is designed to attract greater levels of private sector participation and use EIF’s proven competence in managing such structures;
Adopt a governance structure will allows all stakeholders to participate and steer the implementation towards the agreed objectives;
Deliver a concrete and action-oriented example of Nordic Council collaboration.
Key Advantages
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Research and Discussion phase – completed
Formal Proposal issued – June 2010
Ministers Meeting – October 13th
Formal ‘Go or No Go’ decision from each Government – March 2012
Formalised commitment (MoU and contract) – mid 2012
Operational Launch – January 2013
Timetable and Next Steps
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Contact
European Investment Fund
96 boulevard Konrad Adenauer
L-2968 Luxembourg
Graham Cope, [email protected] Tel: + 352 42 66 88 236
www.eif.org
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Disappearing market players in Nordic Region