Supporting Innovation Taftie Academy Strasbourg, 22nd September - PowerPoint PPT Presentation

Supporting Innovation Taftie Academy Strasbourg, 22nd September 2016 1

InnovFin Product Overview 2

InnovFin SME Guarantee This guarantee instrument covers the risk related to losses of a portfolio 3

Key Guarantee Terms Direct Guarantees Counter - Guarantees EU 28 & Amount: SMEs H2020 Maturity: up Tangible & Working up to EUR Small Mid- Associated to 10 years Intangible Capital 7.5m (EUR or caps Countries Assets LCY) Loans, Business Innovative credit Transfers lines, bonds, leases Transactions Final Beneficiaries Purpose (senior debt only) 4

Guarantee Fee Guarantee Fee Financial Intermediary Guarantee Fee: Guarantee Fee: Guarantee Financial SME Small Mid-Cap from EIF Intermediary 50% Guarantee 0.50% p.a. 0.80% p.a. Innovative SMEs / Small Mid-caps  Financial Intermediaries are required to transfer the Financial Benefit to SMEs & Small Mid-caps 5

InnovFin SME Venture Capital – key features Focus s on Horizo zon 2020 0 TT, VC and BA F Funds s and Enterpri prise ses s in p pre-se seed, ed, object ctive ves s co co-invest estme ment nt Funds s seed, start rt up phases (seed (e.g. ICT, life science nces, s, focusing g on c compan anies s in & A rounds included) clean an energy gy, technology gy) Early Stage First st 4 t transac sacti tions ns signed d Investm tmen ent t size as of F Febru ruary ary 2016. Pari ri-pass passu, , at least 30%* up to E EUR 3 30m Open Call for Expressi ssion investm tmen ent t from private vate up to 5 50%** of t total of In Interest est until investo tors rs commitm tmen ents ts (CATALYTIC IC) 30/09 09/20 2020 20 * 10% in the case of BA Co-investment Funds ** Up to 70% in the case of BA Co-investment Funds, subject to conditions. 6 6

InnovFin SME Venture Capital – EIF’s assessment Investment readiness Fit with the mandate Team and Track Record (WHO) Adequate skill-set  Track-record  Cohesion /stability/succession  Carry split  Team commitment  Stage of Governance structure: independence/ conflict of investments  interests Policy fit Reputation (referencing)  Countries Market Opportunity (WHY) covered Deal flow/pipeline  Competition  Sectors Investment Strategy (HOW) covered Focus, deal flow and pipeline  Value creation / Unique Selling Point  Coherence with the market opportunity, the  team and the fund parameters Fund Parameters (WHAT) Fund model: fund size / diversification / reserve  policy / investment pace Eligibility Terms and Conditions  Management company budget  Legal structure / compliance  7

InnovFin Product Overview 8

How does the MidCap Guarantee work? Innovative Financial EIF 50% New Mid-Caps Intermediary Guarantee Loans 3,000 employees EUR 25m  50% loss coverage for new mid-cap loans of up to EUR 50m (only for loans not covered under InnovFin SME Guarantee)  Pari-passu sharing of risk and pricing  Full delegation to financial intermediaries  Favourable capital treatment expected 9

How does MidCap Growth Finance work? Innovative EIF Growth Finance / Mezzanine Mid-Caps EUR 25m 3,000 Employees  Direct long term debt and mezzanine finance: EUR 7.5m – EUR 25m  Loans can be structured as economic equity (silent participation)  For innovative Mid-Caps and SMEs (eligible counterparty concept)  EIB can finance up to 50% of all investments over 3 years  Streamlined EIB approval process 10

1 9 17 25 MGF signed transactions MAM (2016) EVS (2013) E-Net (2014) Biosurfit (2015) to date EUR 25m EUR 12m EUR 12m EUR 12m Senior term loan Subordinated loan Quasi-Equity Senior term loan 2 10 18 26 Marposs (2013) Novabase (2014) Jennewein (2015) NEWICON (2016) EUR 10m EUR 25m EUR 14m EUR 8m 26 Senior term loan Quasi-Equity Senior term loan Quasi-Equity 11 3 19 27 15 3 Rovio (2014) Doppelmayr (2015) Marangoni (2014) Archos (2016) EUR 25m EUR 25m EUR 10m EUR 12m 30 Senior term loan Senior term loan Senior term loan Quasi-Equity 4 12 20 28 6 Manz (2014) Innocoll (2015) Gigaclear (2015) System Group (2016) EUR 20m EUR 25m EUR 25m EUR 15m 9 24 Mezzanine loan Quasi-Equity Quasi-Equity Senior term loan 20 14 21 5 13 21 29 1 18 Pharmathen (2014) 27 12 Creta Farms (2016) Saes (2015) Punch (2015) 4 25 EUR 25m EUR 15m EUR 10m EUR 25m 19 Senior term loan 23 Quasi-Equity Senior term loan Senior term loan 16 13 11 6 14 30 22 22 2 8 Welltec (2014) Planon (2015) Figeac (2015) Flexenclosure (2016) 7 28 17 EUR 25m EUR 12m EUR 25m EUR 7.5m Senior term loan Senior term loan Senior term loan Quasi-Equity 10 5 7 16 23 15 29 Pramac (2014) Kiosked (2015) Qwant (2015) EUR 8m EUR 15m EUR 25m Signature pipeline for Quasi-equity Senior term loan Quasi-Equity Quasi-Equity Q1 2016 EFSI 8 16 24 Maier (2014) Danobat (2015) eVision (2016) EUR 7.5m EUR 10m EUR 13.5m Senior term loan Senior term loan Quasi-Equity 11

Advantages No crowding out. Complementary finance to house banks EIB signalling effect to attract other banks & investors (quality stamp) Long-term lending at attractive terms (not subsidised) Growth finance without dilution of shareholders 12

InnovFin Product Overview 13

How does InnovFin Large Projects work? EIF Large Projects Direct Lending EUR 50m – EUR 600m EUR 25m - EUR 300m  Senior debt (pari-passu with other senior lenders)  Eligible project required. EIB finances up to 50% of R&D and innovation investments  Comprehensive due diligence including project due diligence (technical, financial, economic)  EIB standard documentation 14

Advantages Long term loans at attractive terms (pari-passu) Signalling effect and quality stamp (technical expertise) Co-financing with house-banks preferred No cross selling & hold to maturity strategy 15

InnovFin Product Overview 16

Which projects can be supported? Renewable energy Fuel Cells, Hydrogen  Pre-commercial stage; technology needs to be scalable  Loan: EUR 7.5m – EUR 75m; EUR and local currency; maturity of max 15 years; EIB finances up to 50% of project costs.  Comprehensive due diligence including project due diligence (technical, financial, economic)  EIB standard documentation 17

InnovFin Product Overview 18

Which projects can be supported? Infectious diseases Innovative Medical and Manufacturing Vaccines, drugs diagnostic devices plants  Projects which have passed pre-clinical stage and for which clinical validation is needed for further development  Loan: EUR 7.5m – EUR 75m; EUR and local currency; Loan maturity of max 7 years; EIB finances up to 50% of project costs.  Broad range of products - standard debt instruments (i.e. senior, subordinated, and mezzanine) to risk sharing instruments (RSL) with forgiveness options  Comprehensive due diligence, including project due diligence (technical, financial, economic)  EIB standard documentation 19

InnovFin Product Overview 20

Innovation Finance Advisory- What do we do? Enable maximum access to finance for innovative projects Pipeline Development Projects Advisory Horizontal Activities  Improve bankability/investment  Improve framework conditions readiness for financing  Enable earlier/ faster access to  Develop “business case” for Horizontal Projects InnovFin finance new financing mechanisms in Activities Advisory Advisory RDI sectors  Light Project Advisory  Prepare studies on increasing effectiveness of financial instruments to address specific sector/RDI policy objectives Transfer of Lessons Learned  Arctic Arc  Circular Economy (CE)  Fuel Cells and Hydrogen Joint  Key Enabling Technologies (KETs) Undertaking (H2M)  Infectious Diseases Financing  Philips Health Continuum Facility (IDFF)  Bio-economy  RTOs/EARTO Synergies between Projects Advisory and Horizontal Activities 21

Visit www.eib.org/innovfin 22 22