1. DG REGIO OPEN DAYS – MANAGING REGIONAL DEVELOPMENT FINANCIAL INSTRUMENTS FOR SMEs

2. The Rationale for Intervention Identify the degree of market failure in the provision of finance Develop a business culture in which the ability to grow is supported and rewarded Identify and build on the strengths of sectors that have economic potential

3. MSIF Background Launched in 1996 as a unique £25m fund Private sector/public sector partnership Central to Objective One Programme Proven Demand for gap finance in the SME marketplace

4. Structure  Company Limited by Guarantee  Stakeholders - Bank of England, Chamber Of Commerce, MSIF Partners  Private Sector investors plus ERDF  MSIF Board of Directors (non-executive)  Fund Management (executive)

5. Track Record – Objective One Programme 1993-99 £32m successfully invested 600 businesses backed 5000 jobs created or saved £88m private sector money levered in MSIF model replicated in South Yorkshire, Wales and Cornwall

6. Types of Support Available  Loans  Loans with an equity-based premium  Venture Capital  Management Support NO GRANTS  Up to 50% of the total amount needed

7. What we look for  Strong, balanced management team  Commercial Viability  Committed, capable and focused leadership  Quality Business Plan  Great ideas, innovation, unique product or service, proven demand

8. Situations in which we Operate  Start-ups  Businesses needing working/development capital  Rescue – out of receivership  MBOs, MBIs  Syndicated deals

9. Why the model has worked  Established market need – products tailored to those needs  Partnerships/Relationships/Profile  Management Support  Terms of deal balance business needs with commerciality

10. THE VISION  A lasting institution to serve SMEs  Plugging a growing “funding gap”  Working with local partners  Targets in the perceived growth sectors  Continued value for money within Objective One Programme

11. »Questions and Answers