european investment fund promoting innovative smes in europe ritts valencia /pricova seminar

European Investment Fund

Promoting innovative SMEs in Europe

RITTS Valencia /Pricova Seminar13 December 2002

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SUMMARY

Funding innovative SMEs in Europe

• 6th Framework Programme (EC DG Research)

• EIF Venture Capital

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GRANTS: EU 6th Framework Programme

• EUR 17.5bn 2002-2006• In support of research projects in:

– Biotechnology, genomics– IT– Nanotech– Space aeronautics– Food safety– Sustainable development

• Projects conducted at least between Research Centres of 2 EU countries

• For detailed information see: http://europa.eu.int/comm/research/conferences/2002/index_en.html

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VENTURE CAPITAL Through the EIF

5WHEN?

Created in 1994. Mission redefined in 2000: EIF becomes the EU specialised financial

body for SMEs, acting through: Venture Capital (fund of funds) and Guarantees for SME portfolios

WHO ?

Subscribed capital of EUR 2 billion : - 60.75 %: European Investment Bank - 30 %: European Commission- 9.25 %: 28 EU financial institutions

WHY ?

Art 2 : « pursuit of Community objectives » such as growth, employment, knowledge-based economy, innovation, regional developmentArt 24 : « generate an appropriate return on its resources 

6EIF HIGHLIGHTS

Active in the European Union and, since the year 2000, in the EU Candidate Countries.

EIF does not invest in SMEs directly – always works through financial intermediaries.

EIF operations are backed by three sources of funding: own ressources, mandates from the EIB and from the European Community.

EIF own resources to continue to be allocated to early stage tech funds

EIF operations backed by institutional calendar

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EIF Investment strategy: a commercial approach

Terms and conditions•12 year investment•Pari passu investment (like risk like reward)•10-15 million maximum amount•50% of total investment•70% public funding in Objectives 1 & 2 areas

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ETF Start-up

(EU ressources)

Other Ops(EIB+EIF

ressources)

VC operations

Seed Capital start-up Development Capital ….

Life cycle

Financing innovation:EIF intervenes early in the life cycle

EUR 850 millions in 2001

2003 ?

EUR 4 bn invested en 2001 (EU)

EUR 9 bn invested en 2001 (EU)

Early stage

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0

500

1000

1500

2000

2500

1997 1998 1999 2000 2001 2002

VC operated by EIB VC operated by EIF

Evolution of VC operations (signatures – cum. – EUR millions )

EIB transfer (921m)In 2000

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Generalist (Eur 389m)

17%

Tech (Eur 1,385m)

58%E-migration (Eur 58m)

2%

Mezzanine (Eur 87m)

4%

Tech-Regional (Eur 141m)

6%

Regional (Eur 309m)

13%

Venture capital: sector breakdown as at 30/11/02 (EUR 2.39 bn)

11Venture capital: geographical breakdown

as at 30/11/02 (EUR 2.39 bn)

SWEDEN 3%

SPAIN 8%

PORTUGAL 1%

NETHERLANDS 2%

PANEU & MULTI 16%

LUXEMBOURG <1%

ITALY 11%

IRELAND 4%

GREECE 1%

UK 15%

AUSTRIA 2%

BELGIUM 1%

DENMARK 2%

CANDIDATE COUNTRIES 3%

FINLAND 4%

FRANCE 15%GERMANY 11%

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EIF VC OPERATIONS IN SPAIN

• Andalucia Capital Desarollo, F.C.R.

• Baring Iberia Inversión en Capital, F.C.R.

• Bullnet Capital• EBM, F.C.R.• Fondo EURO-ICO, F.C.R.• Fonsinnocat

• GED Iberian Fund• Inversiones en

Telecomunicaciones, F.C.R.

• Milenio L.P. (ex Spark)• Spinnaker Invest• Talde Capital, F.C.R.• TEC Plus III

Total Spain: EUR 188,398,680

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SUPPORT TO FUNDS LINKED WITH RESEARCH: A PRIORITY FOR THE EIF

1. The experience so far:– Heidelberg Innovation– Symbion (University of Copenhagen)– BioAm (French Public Research Institute)– Parco Scientifico Madrid– …EMBL Heidelberg

2. The use of appropriate resources– “ETF Start-up” for the financing of seed

funds and incubators

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PROSPECTS 2003/2004

EIF considers (in cooperation with DG Research) how to invest in “Technology Transfer“ (US model, new developments in Europe…)

Aim is to support financially networks of University & Research Centres

Fill the gap between research and commercialisation / market access– Longer maturity– More risk– More public money– But still commercially run investments

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Contact us

European Investment Fundwww.eif.orginfo@eif.org

Tel +352 42 66 88 1Fax +352 42 66 88 200