CIP
Innovation Norway
European Investment
Fund
19 October 2011
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 2011
Any estimates and projections contained herein involve significant elements of subjective judgment and analysis, which may or may not be correct.
Agenda
•Introduction EIF
•Venture Capital Fund investments – main principles
•Competitiveness and Innovation Framework Programme
1 / 31
EIF at a Glance
EU specialised institution for SMEs, risk financing
Venture Capital and Mezzanine (fund of funds)
Structuring and Guaranteeing portfolios of SME and microfinance loans/leases
Geographic Focus /
Intermediaries
EU 27, EFTA,
Candidate Countries
Distributing through Banks
and Funds
Authorised Capital
€ 3bn
EIB: 62%
EU: 30%
Fin. institutions: 8%
AAA rated
Staffing, Culture and Values
Leading-edge modern institution
Adapting to changing market conditions
Attracting talented staff
High standards of compliance and integrity
2 / 31
Dual Objective of Meeting EU Policy Goals & Generating a
Satisfactory Return on Equity
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:
3 / 31
Operating Model of EIF
Transformational Role of EIF
Suppliers /
Mandators
Own resources
EIB (RCM, MEZ)
EC (CIP)
MA (JEREMIE)
MS (ERP)
Funds of Funds
Regional (LfA)
Transformational
Key Success
Factors
Product Development
 Commercial Banks
Mandate Management
 Development &
Transaction Execution
Promotional Banks
Risk Management
 Guarantee Institutions
Follow-up &
 Fund Managers
Relationship Focus
VALUE ADDED
4 / 31
Intermediaries
SMEs
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
5 / 31
Europe’s leading developer of risk financing for
entrepreneurship and innovation
Agenda
•Introduction EIF
•Venture Capital Fund investments – main principles
•Competitiveness and Innovation Framework Programme
6 / 31
The PE/VC Market Covered by EIF
VENTURE
CAPITAL
INNOVATION
Tech
Transfer/
Incubators
Business
Angels,
Side Funds,
Pre-Seed
Seed
Stage
PRIVATE
EQUITY
Early
Stage
Expansion
Development
Capital
EIF INVESTMENT FOCUS
7 / 31
MidMarket
Laterstage
Buy-out
Stock
Exchange/
Public
Equity
Technology Transfer - Converting Research
into Products for the Market
R&D
Technology Transfer
“technology IP”
University /
Research
Organisation
8 / 31
“prototype IP”
Market
Spin-out
Licensing
IP / Idea
Marketable Product
Collaboration
(contract research,…)
EIF's Tech Transfer Improves the
Commercialisation of Research
 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
9 / 31
Provider of Innovative Solutions to VC Constraints
Venture and Growth Overview
 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)
10 / 31
Key Investor in Major Markets
Increased Finance to Support less Developed Markets
Primary Fund-of-Funds Investor
 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
11 / 31
Long-term Relationship with best GPs in Europe
EUR m
Lithuania 40
Luxembourg 21
Malta 8
Netherlands 109
Norway 20
Poland 92
Portugal 155
Romania 36
Slovakia 4
Spain 424
Sweden 280
Switzerland 81
Turkey 274
United Kingdom 1306
Other & Non EU 361
Austria 54
Belgium 83
Bulgaria 13
Cyprus 7
Czech Republic 28
Denmark 95
Estonia 7
Finland 115
France 768
Germany 558
Greece 15
Hungary 16
Ireland 89
Italy 267
Latvia 36
EU 27
EU Candidate Countries
12 / 31
EFTA/EEA
Venture & Growth Capital Portfolio
€5.4 bn Net Equity Commitments
across Europe at 31.12.2010
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
13 / 31
Agenda
•Introduction EIF
•Venture Capital Fund investments – main principles
•Competitiveness and Innovation Framework Programme
14 / 31
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
15 / 31
Competitiveness & Innovation Framework
Programme (CIP) GIF Investments
22 DEALS SIGNED to date for over € 270m
360 Capital One
3T Telecom Technologies Transfert
Albuquerque FCR
Baltcap Private Equity Fund
Bullnet Capital II
Cape Regione Siciliana
Capricorn Cleantech Fund
Chalmers Innovation Fund
Conor Technology Fund II
Creathor Venture Fund III
Demeter Fund II
Dritte SHS Technologie GmbH & Co. KG
Fountain Healthcare Partners Fund I
HPE PRO Institutional Fund
Inventure Fund Ky (ex Holtron)
Newion Investments II
NorthCap IVS III
Pentech Fund II
Pinova Fund I
Serena Capital
UMIP-MTI TTA Fund
WHEB Ventures Private Equity Fund II
Countries covered by CIP GIF and targeted by the agreements signed
16 / 31
Other countries covered by CIP G GIF but where no agreements have been signed to date
Other countries and territories
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.
17 / 31
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
18 / 31
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
19 / 31