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