Opportunities for SMEs in different stages of development€¦ · Key role in financing innovation...
Transcript of Opportunities for SMEs in different stages of development€¦ · Key role in financing innovation...
Opportunities for SMEs in different stages of development
Valencia, 20 June 2013
José Cabrita
What is the EIF?
Section One
2
What is the EIF?
We’re the leading developer ofrisk financing for entrepreneurshipand innovation across the EU
“”
Fulfillingour dual goal and pursue EUpolicy objectives as well as financial sustainability
Addressingmarket needs by acting as a countercyclicalinvestor in tough economic times
Workingwith financial intermediaries across the 27 EU countries, EFTA and all Accession countries
HelpingSMEs, micro-enterprises and European regions innovate and grow by making finance more accessible
3
Our counterparts
We work with a wide range ofcounterparts to support SMEs“ ”
micro-enterprises,
SMEsand small mid-caps
Fund providers and Mandators European Investment
Bank
European Commission
Member States
Managing Authorities
Funds of Funds
Corporates/private
Public institutes
Intermediaries and counterparts Commercial Banks
Development &Promotional Banks
Guarantee Institutions
Leasing Companies
Fund Managers
Microfinance Institutions
4
Optimising EC resources
5
We manage programmes for the EC that deploySME funding to promote entrepreneurshipand innovation across Europe
“”
The Competitiveness &Innovation Programme(CIP SMEG) Available budget of over
EUR 600m Committed budget of
EUR 420m expected to mobilise EUR 7bn
53 transactions signed in 20 European countries
The Risk-SharingInstrument (RSI)
Pilot project Supporting innovation Launched in Dec 2011,
targeting innovative and research-orientedSMEs and small mid-caps
Progress Microfinance
EUR 200m provided bythe EC and the EIB
Supporting micro-enterprises and thesocial economy
More than 50% committedat June 2012
Strengthening partnershipswith stakeholders
6
European Investment Bank
Invest additional Equity and Mezzanine Funds arising from EIB Capital Increase
Optimise joint operations to provideliquidity, risk sharing and capital reliefto SME banks
European Commission 2014-2020
Deploy “Competitiveness for SME’s” (COSME) programme (DG Enterprise)
Key role in financing innovation through Horizon 2020 (DG Research)
Expand microfinance and socialinvestment (DG Employment)
Member States, Accession Countries and national institutions
Equity Fund of Fund tool box Structural fund instruments and management Advisory / know-how transfer Joint initiatives with Development Banks and Guarantee Institutions across the EU
EIF-managed Fund-of-Funds and Holding Funds across Europe
7
Fund‐of‐Fund Activity
UK FTF: GBP 200m
ERP (DE): EUR 1000m
LFA-EIF (DE): EUR 50m
Dahlia (FR): EUR 300m
NEOTEC (SP): EUR 183m
PVCi (PT): EUR 111m
iVCi (TR): EUR 160m
Future initiativesLFF (LU): EUR 150m
BIF (LT,LV,EE): EUR100m
DVI (NL): EUR 150m
Holding Funds Supported by Structural Funds (JEREMIE)
BULGARIA: EUR 349m
CALABRIA (I): EUR 45m
CAMPANIA (I): EUR 90m
CYPRUS: EUR 20m
EXTREMADURA (ES) : EUR 10m
GREECE: EUR 250m
LANGUEDOCROUSSILLON (FR): EUR 30m
LITHUANIA: EUR 180m
ROMANIA: EUR 100m
MALTA: EUR 10m
PACA (FR): EUR 20m
SLOVAKIA: EUR 100m
SICILY (I): EUR 60m
SICILY ESF (I): EUR 15m
Helping businessesat every stage
8
SME Development StagesPRE-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
EIF Investment Activity Summary - Spain
Section Two
EIF Investment ActivitySummary - Spain
10
Equity – 2012
11
EUR 105m of equity resources committed to Spain during the year 2012, with the expectation of mobilising a total of EUR 210m
Venture capital / Neotec Capital Riesgo Adara II: An investment of up to EUR 15m was signed (“dry closing”) in
Q4 2012 Seaya I: An investment of up to EUR 20m was signed (“wet closing”)
in Q4 2012 Mid-market / Mezzanine
An investment of up to EUR 40m was signed in Oquendo II, the first Mezzanine provider fund in Spain
Business Angels A Memorandum of Understanding was signed between the EIF and
ICO for the set-up of the EAF Spain – Fondo Isabel La Católica, the Spanish compartment of the European Angels Fund. Total size of the initiative, after an investment from Neotec / CDTi, is of EUR 30m
Guarantees, Securitisation& Microfinance – 2012
12
EIF continues to strongly support Spanish financial institutions through innovative solutions
A securitization deal with Lico Leasing was executed in 2012 (EUR 78m) A guarantee on a credit line with ICO was performed :
Total size of the guarantee of EUR 200m, allowing ICO to release the same amounts from a financial intermediary
Commitment from ICO to use the released funds into new loans to SMEs Represented the implementation of a recently developed in-house product Trade will now be extendable with the collaboration of the EIB
First Spanish Risk Sharing Innovation deal signed in 2012: Up to EUR 120m portfolio (potentially increasing) 50% guarantee rate
EUR 27m CIP counter-guarantee deal signed with CERSA (almost “flow” business…)
Neotec Capital Riesgo
Section Three
Neotec I – OverviewStructure and shareholders
14
EUR 50m EUR 126m EUR 7m
GeneralistFunds
Tech / Innov.Funds
YoungFunds
EstablishedTech Funds
Co‐Investments
GeneralistSMEs
Tech / Innov.SMEs
Tech / Innov.SMEs Neotec invests alongside
pari‐passu
Core Targets
Financing of an array of technology & innovative SMEsvia a number of different Spanish and foreign VC players
15
Neotec I – Overview (cont’d)Evolution of monies deployed to companies under Neotec
EUR 174.3m committed to 12 Venture Capital funds
Over EUR 47m invested in more than ultimately 90 portfolio companies
Over EUR 365m invested by the portfolio funds in those same companies
Represents a total programme leverage of 8x
Supported new teams (e.g. Debaeque, Seaya, Active, Cabiedes)
EUR 10m co-invested with 2 Venture Capital funds
EUR 6.6m invested in 4 companies
Proven track record of attracting international blue-chip investors to Spain (e.g. Amadeus, GIMV, Trident, etc.)
Over 68% CAGR in money deployed tocompanies over the last 6 years and…
expected to grow further
EAF Spain – Fondo Isabel la Católica
Section Four
17
EAF Spain – Fondo Isabel La CatólicaA Spanish Business Angel Co-Investment Scheme
A Business Angel (“BA”) Co-investment programme dedicated to Spain: Sponsored by Axis (subsidiary of Grupo ICO)
Axis’ mission is to use risk capital in order to provide equity and quasi-equity financing for the expansion and growth of companies incorporated in Spain
Grupo ICO has a long-standing relationship with EIF and a significant history on the development of financing solutions to Spanish companies with the broader EIB Group
EIF and Neotec co-investment
Implemented and advised by the EIF
Scheme for “non-institutionalised” investors that supportsthe development of a well functioning part of the
chain of finance for SMEs and innovation
EAF Spain – Fondo Isabel La Católica (cont’d)Assessment of the market and impact on the landscape
18
Spain is the country with the biggest representation in EBAN’s European based members! (c. 14% of representation, followed by 11% UK, 7% Turkey, 6% France and 5% Germany)
Although not the “perfect” indicator, the above serves as a proxy that indicates a strong BA activity in Spain and a market with potential
In any case, initial discussions with Spanish BAs, Spanish BA networks and academic experts indicate that the market is significantly fragmented and it is difficult to find main patterns / trends
Given the above, the implementation of a public scheme with a significant size can have, at this early stage of the development of the Spanish BA market, a meaningful and positive impact in shaping the BA landscape in Spain for years to come
EAF Spain – Fondo Isabel La Católica (cont’d)
19
JEREMIE Extremadura
Section Five
Delivering financial engineeringwith Structural Funds
21
European CommissionERDF – DG Regio
Managing Authority
Holding Fund / Holding Fund Manager
Financial intermediaries
SMEs and micro-enterprises
Reg
iona
l/ /L
ocal
Lev
el
Nat
iona
l/ R
egio
nal/
Loca
l Lev
elN
atio
nal
or re
gion
al L
evel
EU L
evel Disbursement Up front Irreversible
Local Holding Fund Greater delegation to Local Authorities Management/administration are outsourced to
a Holding Fund Manager which is selected bythe 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:Funded Risk Sharing
22
Structure FRSP objective is to incentivize banks to extend loans
and similar debt financing to SMEs, through a portfolio credit risk sharing. The FRSP is a loan from EIF to a Financial Intermediary, combined with a risk sharing of the underlying SME loans financed through the FRSP. The Financial Intermediary tops up the EIF loan by the same amount, typically resulting into a 50% co-financing rate.
Eligible Financial Intermediaries Public and private institutions in the member states
which provide loans and financial leases to micro-enterprises and SMEs
Purpose: Support long-term business development (such as
business transfers, investment in tangible assets and investment in intangible assets), and/or working capital linked to development or expansion activities.
Final Beneficiaries: Micro, small or medium-sized enterprisesFRSP Pricing From 0% to the Financial Intermediary pricing on SME
loans. A deposit rate is also charged on the funds drawdown by Intermediary which: i) have not yet been disbursed to SMEs or II) have been repaid by SMEs to Intermediary but not transferred yet to EIF
Financial Benefit to SMEs Differential between market rate and FRSP interest rate
plus any intermediation cost left at the Intermediary level Typically 50% risk coverage
FRSP
Losses
SME Loans
FRSP Interest
Interest
EIF(‘Lender’)
Co financingRate
SME Borrower
SME Borrower
SME Borrower
SME Borrower
SME Borrower
SME Borrower
SME Borrower
SME Borrower
SME Borrower
SME Borrower
SME Borrower
SME Borrower
SME Borrower
SME Borrower
SME Borrower
SME Borrower
Matched funding by the Financial Intermediary(1-Co financing rate) Financial
Intermediary‘Borrower’
EIF‘Lender’
Pari-passuLosses*
According to Co financing rate
JEREMIE co-financing in Extremadura: 60%
Contact details
José Cabrita, EIF Resident Representative Madrid Office
Fondo Europeo de InversionesC/ José Ortega y Gasset 29, 6ª
28006 Madrid
+34 91 436 0863
23