1. Europe’s Leading Developer of Risk Financing for Entrepreneurship & Innovation This presentation was prepared by EIF. The information included in this presentation is based on figures available for March 2011 Any estimates and projections contained herein involve significant elements of subjective judgment and analysis, which may or may not be correct. European Investment Fund Graham Cope Senior Head of Region North Europe & CEE

2. 1 EUR 6 billion net commitments to PE/VC funds at end 2011 As Primary FoFs investor (over 350 funds) Biggest Fund-of-Funds investing in European Venture Capital Repeat cornerstone investor in top quartile teams in Europe Catalytic role through recognised thoroughness of its due diligence process Fund Manager for MS government mandates EIF: Europe’s Primary Fund-of-Funds Investor Long-term Relationship with best GPs in Europe

3. 2 ERP Germany (launched in 2004) Co-investment 50/50: EIF/ERP (German Ministry BMWi) Size: € 1bn - € 642m committed in 20 funds LfA-EIF Germany Co-investment Bavarian Ministry of Economics LfA Förderbank, Bayern EIF. Size € 50m - € 26m committed in 4 funds NEOTEC: Spanish Technology Fund-of-Funds Tech fund in partnership with CDTI (TMT, ICT, clean-tech, bio-tech and LS) Size: € 183m - € 117m in 11 Funds and Co-investment Agreements Istanbul Venture Capital Initiative Turkish generalist VC investment vehicle for institutional investors Size: € 160m - 2 funds signed for a total of € 21m Portuguese Venture Capital Initiative Generalists funds, ICT, Life Sciences, Healthcare, Environmental & Energy Technology Size: € 111m – 2 transactions signed for a total of € 30m Dahlia: Pan-European Fund-of-Funds Joint initiative between EIF and Natixis Private Equity (NPE) Size: € 300m - over 60% of Dahlia funding has now been committed UKFTF: UK technology Fund-of-Funds Launched by the UK government and advised by EIF Size: £200m at first closing to be invested in Funds targeting UK start-ups and growth businesses in the high tech sector – 3 investments signed for £ 28m Public Private Leveraging of EIF Capacity and Experience EIF as Manager of National Funds-of-Funds

4. 3 As investor in BaltCap Private Equity Fund in 2007 for EUR 10m As Manager of JEREMIE Holding Fund in Latvia from 2008 Invested in Baltcap Latvia VC Fund for EUR 20m in 2009 Invested in Imprimatur Capital Seed & Start-Up Fund for EUR 17m in 2010 As Manager of JEREMIE Holding Fund in Lithuania from 2008 Invested in Baltcap Lithunia VC Fund for EUR 14m in 2010 Invested in LitCapital VC Fund for EUR 14m in 2010 Invested in Strata/MES Co-Investment Fund for EUR 8m in 2010 Invested in Practica Seed & Venture Capital Fund for EUR 17m in 2012 Note: Estonia chose not to implement a JEREMIE Holding Fund hence investment levels by EIF have been limited to date EIF: as investor in the Baltics Key role as developer of venture capital markets EUR 100m invested into Baltic market

5. 4 Baltic Equity Investments remain comparatively low Very latest EVCA data for 2011 European average investment level is 3-4 times greater than for Baltic Countries Estonia is in weakest position of the 3 Baltic States Estonia is only 0.04% of GDP, ten times lower than in Finland Weak position

6. 5 EIF’s Development of a PE/VC market - Baltics Continued Ecosystem Development Phase One Careful Utilisation of Structural Funds Typically 70/30 Phase Two Balanced with Private Investment Typically 50/50 First Transactions with external help Set up of VC Association, adoption of EVCA standards First attraction of local private capital ‘Proof of Concept’ Phase Education of Entrepreneurs Establishment of BA networks Legal Framework; Taxation Laws, Advisory Support Networks, etc. State Funds alongside IFI investment Second time Fund transactions International investors drawn in by market opportunities Deeper pool of Local expertise Phase Three Private Investment flows dominate public funds 25/75 Market Maturity

7. 6 EIF asked Baltic VC associations to help in sizing the opportunity 7 Fund managers in region provided detail of expected pipeline Data provided totals EUR 320m of investment opportunities Wide range of industries covered:- ICT, Pharmaceuticals, Textile, E-Commerce, Electronics, Software, Energy Efficiency, Healthcare, Industrial products etc Mainly later stage opportunities exploring regional expansion or growth into export markets Sometimes includes follow-on investments from earlier seed and start- up activities that have been publicly funded Strong evidence of market need and opportunity BIF - Market Needs and Opportunities “There is a clear need for action to support the market. The proposed BIF amount is well-grounded by market data.”

8. 7 Public Stock Markets SME Cash FlowsInvestment Rounds SME Development Stages Pre-seed Phase HIGHER RISK Seed PhaseStart-up Phase LOWER RISK Emerging Growth Development EIF Tool Kit for Equity investments into SMEs VC & Early Stage Formal VC Funds & Mezzanine Funds Grants, Business Angels, Seed Trade Sale/IPO

9. 8 Public Stock Markets SME Cash FlowsInvestment Rounds SME Development Stages Pre-seed Phase HIGHER RISK Seed PhaseStart-up Phase LOWER RISK Emerging Growth Development EIF Tool Kit for Equity investments into SMEs VC & Early Stage Formal VC Funds & Mezzanine Funds Grants, Business Angels, Seed Trade Sale/IPO These phases covered by current initiatives; but must be continued. Private money very reluctant to invest here so smart use of Structural Funds is wise

10. 9 Public Stock Markets SME Cash FlowsInvestment Rounds SME Development Stages Pre-seed Phase HIGHER RISK Seed PhaseStart-up Phase LOWER RISK Emerging Growth Development Stage focus of the Baltic Innovation Fund VC & Early Stage Formal VC Funds & Mezzanine Funds Grants, Business Angels, Seed Trade Sale/IPO These phases barely supported but private investors can be stimulated to invest here

11. 10 Baltic Innovation Fund – Basic Structure Baltic Innovation Fund Baltic Region SME Community SMEs EE VC Fund A VC Fund B VC Fund C LV LT EIF BIF will be managed by EIF cooperating with local agencies Institutional Investors, HNWIs

12. 11 Increasing the levels of equity Investment made into Enterprises BIF will create greater levels of equity investment in the region than ever before With the expected leverage, the amount of equity investment created across the period will relate to a substantial increase of market activity Establishing a sound market-based infrastructure BIF will establish a platform and focus that will create a stable portfolio of equity fund managers in the region The BIF structure implements a best practice Fund of Funds model never before implemented in the Baltics BIF creates an infrastructural base of interest to other IFIs Generating positive returns to investors in the BIF This is not a grant mechanism, it is an investment intended to generate positive returns BIF will be structured and managed to create the best opportunity for investment returns BIF will adopt a certain level of diversification in the portfolio and across years (vintages) Objectives of the Baltic Innovation Fund

13. 12 Creating the best entry conditions for Pension Funds BIF will act as a cornerstone investor applying the best practice standards implemented by EIF and thereby giving confidence to institutional investors BIF’s regional approach offers the geographic diversification needed to attract Pension Fund capital Attract foreign investors and investment managers to the region BIF will become a marketing tool for all 3 Baltic Countries EIF will seek to ensure foreign investment managers are fully aware that BIF offers as a market-entry opportunity and/or co-investment potential The BIF concept will raise awareness of investment opportunities in the region Objectives of the Baltic Innovation Fund

14. 13 Baltic Innovation Fund – Basic Financing Baltic Innovation Fund = EUR 100m Baltic Region SME Community SMEs EE VC Fund A VC Fund B VC Fund C LV LT EIF EIF management cooperating with local agencies Institutional Investors, HNWIs EUR 60m EUR 40m 50% from Private Investors A total of EUR 200m expected to be invested into enterprises by selected local fund management teams

15. 14 BIF – in action – an example portfolio BIF – Capital of EUR 100m Wider Baltic Region SME Community SMEs EE €20m EE €20m VC Fund A €30m VC Fund A €30m LV €20m LV €20m LT €20m LT €20m EIF €40m EIF €40m €15m VC Fund A invests into 12 SMEs - generalist Co-Invest ments €30m Co-Invest ments €30m PE Fund A €50m PE Fund A €50m PE Fund B €60m PE Fund B €60m VC Fund B €30m VC Fund B €30m €15m €25m €15m VC Fund A invests into 12 SMEs - ICT focus VC Fund A invests into 14 SMEs - generalist VC Fund A invests into 12 SMEs - generalist Co- Investments into 5-10 SMEs Over €200m invested into approx 50 high growth enterprises Private leverage maximised eg: 2.0x

16. 15 Contact European Investment Fund 96 boulevard Konrad Adenauer L-2968 Luxembourg Graham Cope, g.cope@eif.org Tel: + 352 42 66 88 236g.cope@eif.org Martins Jansons, m.jansons@eif.org Tel + 352 42 66 88 381m.jansons@eif.org Jurate Azelionyte, j.azelionyte@eif.org Tel + 370 5269 0104j.azelionyte@eif.org www.eif.org