European Investment Fund Promoting innovative SMEs in Europe RITTS Valencia /Pricova Seminar 13 December 2002

2 SUMMARY Funding innovative SMEs in Europe 6 th Framework Programme (EC DG Research) EIF Venture Capital

3 GRANTS: EU 6 th Framework Programme EUR 17.5bn In support of research projects in: –Biotechnology, genomics –IT –Nanotech –Space aeronautics –Food safety –Sustainable development Projects conducted at least between Research Centres of 2 EU countries For detailed information see: s/2002/index_en.html

4 VENTURE CAPITAL Through the EIF

5 WHEN? Created in Mission redefined in 2000: EIF becomes the EU specialised financial body for SMEs, acting through: Venture Capital (fund of funds) and Guarantees for SME portfolios WHO ? Subscribed capital of EUR 2 billion : %: European Investment Bank - 30 %: European Commission %: 28 EU financial institutions WHY ? Art 2 : « pursuit of Community objectives » such as growth, employment, knowledge-based economy, innovation, regional development Art 24 : « generate an appropriate return on its resources

6 EIF HIGHLIGHTS Active in the European Union and, since the year 2000, in the EU Candidate Countries. EIF does not invest in SMEs directly – always works through financial intermediaries. EIF operations are backed by three sources of funding: own ressources, mandates from the EIB and from the European Community. EIF own resources to continue to be allocated to early stage tech funds EIF operations backed by institutional calendar

7 EIF Investment strategy: a commercial approach Terms and conditions 12 year investment Pari passu investment (like risk like reward) million maximum amount 50% of total investment 70% public funding in Objectives 1 & 2 areas

8 ETF Start-up (EU ressources) Other Ops (EIB+EIF ressources) VC operations Seed Capital start-up Development Capital …. Life cycle Financing innovation: EIF intervenes early in the life cycle EUR 850 millions in ? EUR 4 bn invested en 2001 (EU) EUR 9 bn invested en 2001 (EU) Early stage

9 Evolution of VC operations (signatures – cum. – EUR millions ) EIB transfer (921m) In 2000

10 Venture capital: sector breakdown as at 30/11/02 (EUR 2.39 bn)

11 Venture capital: geographical breakdown as at 30/11/02 (EUR 2.39 bn) SWEDEN 3% SPAIN 8% PORTUGAL 1% NETHERLANDS 2% PANEU & MULTI 16% LUXEMBOURG <1% ITALY 11% IRELAND 4% GREECE 1% UK 15% AUSTRIA 2% BELGIUM 1% DENMARK 2% CANDIDATE COUNTRIES 3% FINLAND 4% FRANCE 15% GERMANY 11%

12 EIF VC OPERATIONS IN SPAIN Andalucia Capital Desarollo, F.C.R. Baring Iberia Inversión en Capital, F.C.R. Bullnet Capital EBM, F.C.R. Fondo EURO-ICO, F.C.R. Fonsinnocat GED Iberian Fund Inversiones en Telecomunicaciones, F.C.R. Milenio L.P. (ex Spark) Spinnaker Invest Talde Capital, F.C.R. TEC Plus III Total Spain: EUR 188,398,680

13 SUPPORT TO FUNDS LINKED WITH RESEARCH: A PRIORITY FOR THE EIF 1.The experience so far: –Heidelberg Innovation –Symbion (University of Copenhagen) –BioAm (French Public Research Institute) –Parco Scientifico Madrid –…EMBL Heidelberg 2.The use of appropriate resources –“ETF Start-up” for the financing of seed funds and incubators

14 PROSPECTS 2003/2004 EIF considers (in cooperation with DG Research) how to invest in “Technology Transfer“ (US model, new developments in Europe…) Aim is to support financially networks of University & Research Centres Fill the gap between research and commercialisation / market access –Longer maturity –More risk –More public money –But still commercially run investments

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