Last year, commitments by the European Investment Fund (EIF) to venture capital rose to over EURO800 million, invested in 57 funds. The EIF began its involvement in venture capital in 1997, and in 2000 invested EURO93 million. In 2001 the EIF strengthened its VC operations, building on reforms made in June 2000, which concentrated all the European Investment Bank (EIB) group’s venture capital activities in the hands of the EIF. It now has a total VC portfolio of over EURO2 billion, invested in 153 funds.
The EIF, a joint venture between the EIB (60 per cent), the European Commission (30 per cent) and a number of European banks and financial institutions, provides guarantees for SMEs as well as investing in VC funds. Last year it signed guarantees worth EURO958 million. The EIB provided nearly EURO700 million of the EIF’s VC investments last year under two mandates, the European Technology Facility and the Risk Capital Mandate. The EIF’s aim is to combine European Community objectives (innovation, the creation of employment and regional development) with a commercial approach to investments.
Out of the EURO800 million invested last year EURO49 million was EU budgetary funds managed by the EIF under the ETF Start-up scheme. This invests in seed funds, incubators, regional funds, specific industry or technology funds and smaller or newly established funds. The EIF invests in venture capital funds raising more than EURO15 million; it typically commits between EURO2 million and EURO12 million or up to 25 per cent of the total capital.
Walter Cernoia, chief executive of the EIF, said: “The intense investment activity of the EIF in venture capital, in supporting technology and high growth SMEs, played an important role in this time of considerable market disruption.” Of the total invested last year, 68 per cent went to technology funds with a further 12 per cent invested in regional technology funds. The remainder was invested in generalist funds.
In 2001 the EIF invested in all 15 member states of the EU and committed EURO65 million (or eight per cent of the total invested) to funds in the accession countries in Eastern and Southern Europe. Funds in the UK received EURO116.3 million, France EURO87.1 million, Germany EURO79.2 million and Spain EURO70 million, nearly 20 per cent of the money was invested in pan-European funds.