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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A significant number of Fund Managers have withdrawn from the sector or simply closed operations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, g.cope@eif.org Tel: + 352 42 66 88 236

www.eif.org

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Disappearing market players in Nordic Region