Fondo Europeo de Inversiones Madrid, 30 de Octubre de 2013 Marco - - PowerPoint PPT Presentation

El Papel del Fondo Europeo de Inversiones

Madrid, 30 de Octubre de 2013

Marco Marrone

What is the EIF?

Section One

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A few key facts about us…

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EU specialised institution for SMEs, risk financing Venture Capital and Mezzanine (fund of funds, business angels) Structuring and Guaranteeing portfolios of SME and microfinance loans/leases Authorised Capital € 3bn EIB: 62.1% EU: 30 %

• Fin. institutions: 7.9 %

Geographic Focus / Intermediaries EU 28, EFTA, Candidate Countries Always working with Financial Intermediaries

AAA rated

Dual Objective Meeting EU Policy Goals Generating a Satisfactory Return on Equity

Helping SME businesses at every stage

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SME Development Stages

PRE-SEED PHASE SEED PHASE START-UP PHASE EMERGING GROWTH DEVELOPMENT

HIGHER RISK LOWER RISK Public Stock Markets

Business Angels, Technology Transfer

Microcredit VC Seed & Early Stage Portfolio Guarantees & Credit Enhancement Formal VC Funds & Mezzanine Funds

Our business partners

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We work with a wide range of business partners to support SMEs

“ ”

micro- enterprises, SMEs and small mid-caps

Resources and Mandators

• EIF own resources
• European Investment

Bank

• European Commission
• Member States/Regions
• Development Agencies
• Corporates/private
• Public institutions
• Other third parties

Business Partners

• Fund Managers
• Commercial Banks
• Development &

Promotional Banks

• Guarantee Institutions
• Leasing Companies
• Corporates
• Business Angels
• Microfinance Institutions

Venture & Growth Capital Portfolio

€ 7bn Net Equity Commitments across Europe at end-2012

€ 4.7bn* in Outstanding Guarantee Commitments across Europe at end-2012

Guarantees and Securitisation

*Maximum liability

EIF investment activity in Spain

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At end-2012, EIF was the largest investor in the Spanish VC arena Spain represented, by then, over 12% of the total G&S activity of EIF



EIF has committed over EUR 520m into 29 independent Spanish Venture Capital, Private Equity and Mezzanine Funds, mainly targeting technology fields (ICT, TMT, Biotech, etc.)



Over EUR 3.0 bn loans to SMEs have benefited from guarantee and securitization activities:



EUR 422.5m have been committed from own funds



EUR 253m covered through EC mandates



Counterparts include blue chips institutions such as ICO, Banco Santander, BBVA or Caixabank as well as government agencies e.g. CERSA

Sample EIF Transactions Leveraging on EC Resources

Section Two

Optimising EU resources

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We manage programmes that deploy SME funding to promote entrepreneurship and innovation across Europe

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• Comp. & Innovation

Programme (CIP)

• Guarantee and Venture

Capital instruments aiming at promoting competitiveness, innovation, entrepreneurship and access to finance

• Available budget of over

EUR 1,100m

Risk-Sharing Instrument (RSI)

• Pilot project
• Launched in Dec 2011,

targeting innovative and research-oriented SMEs and small mid-caps

• Target aggregate portfolio of

EUR 2.5bn in loans (guarantee amount of EUR 1.25bn)

Progress Microfinance

• Joint EIB-EC-EIF initiative
• Supporting micro-enterprises

and the social economy

• EUR 200m made available

jointly by the EC and the EIB

JEREMIE

• Delivering financial

engineering with structural funds

• Regional / National holding

funds with greater delegation to managing authorities

• 14 JEREMIE holding funds

under management for a total of EUR 1,100m

JEREMIE: Delivering financial engineering with Structural Funds

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European Commission ERDF – DG Regio Managing Authority Holding Fund / Holding Fund Manager Financial intermediaries SMEs and micro-enterprises Regional/ /Local Level National/ Regional/ Local Level National

• r regional Level

EU Level

Disbursement

• Up front
• Irreversible

Local Holding Fund

• Greater delegation to Local Authorities
• Management/administration are outsourced to

a Holding Fund Manager which is selected by the Member State / region Holding Fund Manager

Role of the Holding Fund Manager

• Structure investments, select Financial

Intermediaries

• Administer, monitor & report on investments
• Attract a syndicate of financial intermediaries and

investors

• Closely collaborate with national/regional authorities

JEREMIE Extremadura:

Portfolio Risk Sharing via Banco Santander

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Structure

• PRSL objective is to incentivize banks to extend loans

and similar debt financing to SMEs, through a portfolio credit risk sharing. The PRSL is a loan from EIF to a Financial Intermediary, combined with a risk sharing of the underlying SME loans financed through the PRSL. The Financial Intermediary tops up the EIF loan Final Beneficiaries:

• SMEs or self-employed incorporated in Extremadura

PRSL Pricing

• The JEREMIE portion is priced at attractive rates that

can be as low as 0% Financial Benefit to SMEs

• Differential between market rate and PRSL interest rate

plus any intermediation cost left at the Intermediary level

• Typically 50% risk coverage

JEREMIE co-financing in Extremadura: 60%

Banco Santande r ‘Borrower ’

EIF

( ‘ Lender ’ )

Intermediar y ‘ ’

EIF ‘ Lender ’

• passu

Portfolio

• f SME

loans issued by Santande r

Innovative and Research oriented SMEs and small Mid-Caps

 EIF mandated to implement the RSI Facility  Purpose - improve access to debt finance for innovative SMEs

and Small Mid-Caps (Beneficiaries)

 Objective: Incentivise financial intermediaries to extend loans and

leases to SMEs and small mid-caps with significant Research, Development and Innovation activities (loans from EUR 25k to 7.5m, up to 7y maturity)

 EIF provides financial guarantees to selected Financial

Intermediaries (FIs)

 Transfer of benefit  Acceptable portfolio risk profile

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Risk-Sharing for Innovation (RSI)

 In the beginning of 2013, a EUR 60m guarantee transaction was signed

with Bankinter – total loan portfolio of EUR 120m, guarantee rate 50% of losses incurred in each loan, availability 24 months

 Following the success of the transaction and its receptivity by innovative

SMEs, a change has recently been approved to increase the guarantee amount to EUR 80m, allowing for a total loan portfolio of EUR 160m

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RSI case study in Spain

Bankinter

EIF

As guarantor

Risk retained by

Guarantee Rate at 50% on a loan-by-loan basis

Risk covered by the

Portfolio of SME and mid cap loans issued by Bankinter

 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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Competitiveness and Innovation Programme (CIP)

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CIP case study in Spain

Counter-guaranteeing CERSA

Guarantee Rate at 35% = Guarantee Amount of EUR 385m Cap Amount at 7% of 35% = EUR 26.95m

Max Portfolio Volume Benefiting from CIP Guarantee: up to EUR 1,100m

Portfolio of counter- guarantees issued by Cersa

Risk retained by CERSA Risk covered by the

CERSA

EIF: 2013 and Beyond

Section Three

EIF in 2013 and beyond

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The EIF is fully committed to continue the successful implementation of European Initiatives for the new programming period 2014-2020

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COSME

• Potentially the successor

initiative for the Competitiveness and Innovation Programme facility

Risk-Sharing Instrument II (RSI2)

• Possibility of continuing the

collaboration with the European Commission via an increment of the RSI budget (Horizon 2020?)

Progress Microfinance

• Good absorption and

receptivity of the current Progress may lead to a top- up of the programme

JEREMIE II

• Continue the delivery of

financial engineering while leveraging on structural funds, in partnership with MS/Regions

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Legal basis of future funding programme currently being finalised

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Discussions between the EIF and the European Commission are at present on-going

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Terms and Conditions for each of the programmes under discussion

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Interaction with Regions and Member States regarding the next Operational Programme to start soon

Contact details

Marco Marrone, Head of Southern and Western Europe m.marrone@eif.org Fondo Europeo de Inversiones C/ José Ortega y Gasset 29, 6ª 28006 Madrid +34 91 436 0863

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