Zagreb, 3 March 2010
Gunnar B. Mai
CIP Workshop
This presentation was prepared by EIF. The information included in this presentation is based on figures available for January 2010
Any estimates and projections contained herein involve significant elements of subjective judgment and analysis, which may or may not be correct.
Table of Contents
 Some Information about EIF
 The CIP Programme
 The venture capital instruments under CIP
 The guarantee instruments under CIP
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The Challenge: Financing Innovation
amongst SMEs in Europe
 SMEs account for a large proportion of
Europe’s economic activity
 Micro-businesses dominate
employment in countries such as Italy
(48%) and Greece (57%)
 Successive EU summits
put issues of growth, employment,
innovation and competitiveness
high on agenda
 Support to SMEs: one of the top six
EIB Group priorities
Source: Eurostat, Commission Communication on Modern
SME policy for Growth and Employment
 EIF is the SME arm of the EIB Group
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Importance of SMEs as the Foundation
Stone for Tomorrow’s Prosperity
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: 61%
EU: 29 %
Fin. institutions: 9 %
To be issued: 1%
AAA rated
Staffing, 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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Dual Objective of Meeting EU Policy Goals & Generating a
Satisfactory Return on Equity
EIF’s Shareholders*
 EIB: Main Shareholder (61%)




European Investment Bank’s shareholders: 27 EU Member States
Subscribed capital: €165 bn
Total lending : € 350 bn
2009 new lending € 79 bn , an increase of 37%
 European Community represented by the European Commission
(29%)
 30 public and private financial institutions from 17 countries
(9%)
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* 1% of EIF’s shares are still to be issued
Capacity - Guarantees
Under EIF Management at 30/06/2009
€m
EU
Leveraged Portfolio
Budgetary Resources
EIF Own Resources
Estimated Leveraged Portfolio
EIF Exposure
JEREMIE
Leveraged Portfolio
Budgetary Resources
TOT Leveraged Portfolio
Budgetary Resources/Exposure
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30/06/2009
(outstanding)
Next 4 Years
(new commitments)
9 300
550
7 300
450
23 800
3 400
10 500
1 500
N/A
N/A
4 200
700
33 100
3 950
22 000
2 650
Capacity – Venture Capital
Under EIF Management at 30/06/2009
€m
EU
Leveraged Portfolio
Net Commitment*
EIB/EIF VC& Mezzanine
Leveraged Portfolio
Net Commitment*
JEREMIE
Leveraged Portfolio
Net Commitment
TOTAL Portfolio of Funds
Net Commitment
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30/06/2009
(outstanding)
Next 4 Years
(new commitments)
2 400
400
2 400
400
20 700
3 100
9 000
1 800
N/A
N/A
1 500
300
23 100
3 500
12 900
2 500
* Does not include fund of funds and ERP initiatives
Table of Contents
 Some Information about EIF
 The CIP Programme
 The venture capital instruments under CIP
 The guarantee instruments under CIP
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Competitiveness & Innovation Framework
Programme (CIP)
 CIP financial instruments managed by EIF on behalf of the EC
 Purposes
 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
 Products
 Guarantees: SME Guarantee Facility
 Venture capital: High Growth and Innovative SME Facility
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Table of Contents
 Some Information about EIF
 The CIP Programme
 The venture capital instruments under CIP
 The guarantee instruments under CIP
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CIP GIF Venture Capital Facility
■ Two windows
■ GIF 1: Seed & Start-Up Stage
■ GIF 2: Expansion Stage
■ Targeting >50% innovative SMEs
■ Eco-innovation & Business Angel aspects
■ Strong demand to date
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GIF signed commitments:
More than EUR185m in 17 funds
Signed Commitments
GIF1 360 Capital One
France/Italy
mEUR
14.8
Bullnet Capital Fund II
Spain
Capricorn Cleantech Fund
Multi-country
Chalmers Innovation Fund
Sweden
2.9
Conor Technology Fund II
Finland
10.0
Dritte SHS Technologiefonds
Germany
Fountain Healthcare Partners I
Ireland
15.0
Inventure Fund
Finland
10.0
Pentech Fund II
UK/Ireland
Serena Capital
France
12.5
WHEB Ventures II
Multi-country
14.5
UMIP-MTI TTA Fund
Total
UK
GIF2 Albuquerque FCR
2.7
15.0
7.6
5.0
11.5
121.5
Portugal
13.2
Baltcap Private Equity Fund
Estonia
10.0
Cape Regione Siciliana
Italy
Demeter II
Multi-country
20.0
Pinova Fund
Total
Multi-country
15.0
64.5
Total
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Geo
6.4
186.0
Competitiveness & Innovation Framework
Programme (CIP)
COUNTRIES COVERED BY CIP GIF
17 AGREEMENTS SIGNED for over EUR 185m
Inventure Fund Ky (ex Holtron)
Bullnet Fund II
Cape Regione Siciliana
Dritte SHS Technologie GmbH & Co. KG
Demeter II
Pinova Fund I
Fountain Healthcare Partners Fund I
Albuquerque FCR
Chalmers Innovation Fund
Pentech Fund II
UMIP-MTI TTA Fund
360 Capital One
Baltcap Private Equity Fund
Capricorn Cleantech Fund
Serena Capital
WHEB Ventures Private Equity Fund II
Conor Technology Fund II
Countries covered by CIP i.e. GIF agreements signed
Countries eligible for CIP where no GIF agreement has been signed to date
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Other Countries
GIF sector focus:
17 funds, total fund sizes EUR1,18bn
Lifescience
10%
Cleantech
37%
Technology Generalist
8%
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Generalist
21%
ICT
24%
How to Apply
 All information is published on EIF’s website
 No formal application
 Fundraising teams send documentation to EIF
 Initial screening => second screening => due diligence
Proposal to EIF Board and the EC for approval
 Timing: case by case basis. Typically 12 to 18 months
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Table of Contents
 Some Information about EIF
 The CIP Programme
 The venture capital instruments under CIP
 The guarantee instruments under CIP
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CIP SME Guarantee Facility
■ Free of charge capped guarantees provided for additional
risk-taking by intermediaries (guarantee schemes, banks, leasing
companies…) resulting in Enhanced Access to Finance for
SMEs
■ Enables lenders in the current economic environment
to further support SMEs (tighter lending criteria to be
relaxed)
■ Guarantees for investment loans and working capital
■ Selection of intermediaries with wide geographical cover in each
country so that as many SMEs as possible have access
■ Minimum selection criteria (commitment to SME financing,
financing volumes, geographical reach etc.)
■ Visibility and promotion of EC support
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CIP SME Guarantee Facility Instruments
Four business lines, known as "windows“
■ Loan Guarantee Coverage of portfolios of mid- to long-term
debt finance targeting SMEs and focused on investment
financing. Flagship window thanks to its flexibility
and wide-ranging characteristics
■ Micro-Credit Guarantee Coverage of portfolios of micro-
credits to encourage financial institutions to provide financing to
microenterprises, especially start-ups
■ Equity Guarantee Coverage of portfolios of equity and
mezzanine investments in SMEs in the seed and start-up phases.
Aim to help SMEs improve their financial structure
■ Securitisation Guarantees to support securitisation transactions
so that financial institutions may mobilise additional debt
financing for SMEs
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Competitiveness & Innovation Framework
Programme (CIP) SME Guarantees
COUNTRIES COVERED BY CIP GUARANTEES
AGREEMENTS SIGNED 22 F.I. to date
for over € 3.5bn (EUR 195 m of budget)
Austria: Austria Wirtschaftsservice
Belgium: FdP
Bulgaria: BDB, Raiffeisenbank Bulgaria
France: SOCAMA, ADIE, Siagi, Crédit Coopératif
Germany: KfW
Hungary: UniCredit Bank
Ireland: First Step Microfinance
Italy: Alleanza di Garanzia, ATI ITALIA PMI,
Federfidi Lombarda, ATI Fidi. Gar.
Latvia: Hipoteku Banka
Norway: Cultura Sparebank
Poland: BPH
Slovenia: Slovene Enterprise Fund
Spain: CERSA, MicroBank La Caixa
Turkey: KGF
Countries covered by CIP i.e. agreements signed
Countries eligible for CIP Guarantees where no agreement has been signed to date
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Other Countries
General Features (I)
 Free of charge guarantee
 Enhanced Access to finance Requirement that the Guarantee
Facility covers risk that is additional to the one already taken
by the intermediary
 increases in lending volumes, loan maturities, rate of financing covered
 waiver of collateral requirements
 riskier target groups (start-ups, new areas of operation)
the requirement is translated into specific and quantified obligations:
target volumes
 Guarantee conditional on achieving specific volumes
 Special focus on eco-innovation, business transfers, etc.
 Capped guarantees at a pre-agreed level taking into account
expected default and recovery rates, risk premium charged by the
intermediary, requirements as to Enhanced Access to Finance
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General Features (II)
 Visibility SMEs have to be informed of the EC support
 Promotion, Marketing
 link to a dedicated CIP website
 success stories of supported SMEs
 State Aid rules are applicable to EU Guarantees (e.g. de
minimis), except for the Securitisation Window (where
guarantee fees are charged)
 Quarterly and annual reporting requirements and
monitoring
 Commitment fee in case target volumes are not reached,
applicable to all windows except Micro Credit Window
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Window 1: Loan Guarantee
■ Purposes of financing:
investment in tangible, intangible
assets, business transfers, working
capital (loans, leasing)
■ Minimum maturity:
■ Borrowers:
priority to minimum 18 months
■
■
■
■
Guarantee Rate:
up to 50%
Ranking:
pari passu
Guarantee maturity:
Guarantee Cap Rate:
final maturity of up to 10 years
maximum 10%, based on expected
loss
■ Free of charge guarantee
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SMEs according to EU definition
(less than 250 employees)
Window 1: Loan Guarantee - some examples (I)
Successful implementation by banks
 Germany start-up loan (up to EUR 50,000) offered via the
banking system at standardised conditions combined with a 80%
risk coverage
 Bulgaria SME secured loan product with reduced collateral
requirements, increased maturities and reduced cost of financing
 Poland relaxed lending criteria for two existing loan products and
launch of a new loan product in times of restrictive lending policies
 Latvia new development loan product dedicated to start-ups and
young, small companies
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Window 1: Loan Guarantee - some examples (II)
Successful implementation by guarantee schemes
 Italy increased guarantee rates and guaranteed maximum
loan volumes as well as additional industry sectors
 Spain increased counter-guarantee rates and strengthened
focus on providing coverage to long-term SME loans
 France increased volumes of guarantees for small
equipment loans and business transfer loans, granted with
substantially reduced collateral requirements
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Window 2: Micro-Credit Guarantee
■ Purposes of financing:
■ Minimum maturity:
investments, working capital
■ Maximum amount:
■ Borrowers:
EUR 25,000
■ Guarantee Rate:
■ Guarantee maturity:
■ Guarantee Cap Rate:
up to 75%
■ Technical support:
EUR 200 per borrower financed
(up to maximum EUR 50,000)
■ Free of charge guarantee
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priority to minimum12 months
at least 6 months
micro enterprises according to EU
definition (less than 10 employees)
final maturity of up to 5 years
maximum 20% based on expected
loss
Window 2: Micro-Credit Guarantee
Successful implementation by banks and MFIs
 Spain substantially increased lending volumes to micro
enterprises
 Norway substantially increased micro-lending volumes that
would otherwise be constrained due to the small size of the
lender
 Ireland substantially increased lending volumes and higher
risks accepted
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Window 3: Equity/Quasi-Equity Guarantee
■ Purpose of financing:
mezzanine finance, quasi equity or
equity
■ Maximum amount:
■ Borrowers:
EUR 500,000 (equity)
■ Guarantee Rate:
■ Guarantee maturity:
■ Guarantee Cap Rate:
up to 50%
■ Free of charge guarantee
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SMEs according to EU definition, in
seed or start-up phase, or
operating for less than 10 years
final maturity of up to 10 years
maximum 20%, based on expected
loss
Window 4: Securitisation
■ New under the SME Guarantee Facility
■ Securitisation of SME loan portfolios:
■ cover for mezzanine and junior tranches
■ co-investment with EIF own resources may be considered
■ focus on smaller banks, new markets, multi-country and multi
originator transactions
■ support to cover some costs under discussion
■ Cash / synthetic transactions
■ Guarantee rate: up to 100% of guaranteed tranche, max 50%
■
■
■
■
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for First Loss Piece
Term: up to 10 years
Guarantee fees will be charged
Enhanced access to finance: Undertaking to use resources to
provide new loans to SMEs according to EU definition
EU Requirements apply to the newly created (additional)
portfolio (reporting, visibility, audit rights etc)
How to apply and application process
 All information is published on EIF’s website:
www.eif.org
Product description and policy, selection criteria, information
requirements
 Application process:
 Applications in line with the requirements can be pre-selected
 Requirement of further information if necessary
 Due diligence meeting
 Proposal to EIF Board and the EC for approval
 Agreement implementation
 Timing: between 3- 6 months (depending on the quality of
information provided)
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Contact details
 CIP coordinator:
Gunnar MAI
g.mai@eif.org
+352 426688 358
 European Investment Fund
96, boulevard Konrad Adenauer
L-2968 Luxembourg
cip.guarantees@eif.org
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