hubert cottogni, european investment fund

7/30/2019 Hubert Cottogni, European Investment Fund

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Hubert CottogniDeputy Director

Head of Regional BusinessDevelopment

EuropeanInvestment

Fund

This presentation was prepared by EIF. The information included in this presentation is based on figures available for October 2012.

Any estimates and projections contained herein involve significant elements of subjective judgment and analysis, which may or may not be correct.

1st SME Assembly &European Enterprise

Promotion Awards 2012

15-16November

2012,Nicosia

,Cyprus

GROWING THROUGH FINANCE


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Growing through finance

what action should be taken to get finance to SMEs to help them grow?

1. European Investment Fund

2. The JEREMIE model

3. EIFs intervention in financing in Cyprus

4. Case study: Languedoc Roussillon (Fr)


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1. EIFs Business

EIFs main objective is to support SMEsfinancing.

Through its commitment EIF acts as a catalystattracting additional private investments andachieving a broad impact.

EIF operates via guarantees and credit

enhancement activity: EIF is a major provider of

SME loan portfolio guarantees,

Credit enhancement, and

Microfinance.

EIF also operates via equity activity: Private Equity and Mezzanine (fund of funds),

EIF is the leading European fund-of-funds investorin private equity and growth capital.

Europes Leading Developer of Risk Financingfor Entrepreneurship & Innovation


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VALUE ADDED

Own resources

EIB (RCM, MEZ)

EC (CIP)

MA (JEREMIE)

MS (ERP)

Funds of Funds

Regional (LfA)

Product Development

Mandate Management

Transaction Execution

Risk Management

Follow-up &

Relationship Focus

Commercial Banks

Development &

Promotional Banks

Guarantee Institutions

Fund Managers

SMEs

Suppliers /Mandators

Transformational

Key SuccessFactors

Intermediaries

Transformational Role of EIF

1. Operating model of EIF


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EIF Managed FoFs

UK FTF GBP 200m

ERP (DE) EUR 1000m

LfA-EIF(DE) EUR 100m

Dahlia (FR) EUR 300m

NEOTEC (SP) EUR 183 m

PVCi (PT) EU R 111m

iVCi (TR) EUR 160m

New Funds in 2012

MDD (DE) EUR 200m

IFL (LU) EUR 120m

DVCi (NL) EUR 150m

Baltic InnovationFund EUR 100m

EIF Managed JEREMI

Holding Fund (FoFs)

Greece EUR 250m

Romania EUR 100m

Lithuania EUR 210m

Slovakia EUR 100m

LanguedocRoussillon (FR) EUR 30m

Campania (I) EUR 90m

Cyprus EUR 20m

Bulgaria EUR 199m

Sicily (I) EUR 60m

Malta EUR 10m

Sicily ESF EUR 15m

Calabria (I) EUR 45m

PACA (FR) EUR 20m

1. EIF managed European Fund-of-Fundsprogrammes

EIF FoFs EIF JEREMIE


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2. EIFs management approach toJEREMIE Holding Funds

StructuralFunds

ERDF (& ESF)

Holding Fund

NationalContribution

Investment Board

Financialintermediaries

SMEs

Holding FundManager( HF )

Tailor-made portfoliosof financial engineering

instruments to meet

SME needs

Strong governancethrough Investment

Board process

Transparent callprocess to select bestfinancial intermediaries

Professionalnegotiation of contractsleading to contract

signatures

A network of privateinvestors to manageand mobilise structural

funds

Quick response to

adverse economicclimate


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3. EIFs intervention in financing in

Cyprus

JEREMIE Holding Fund EUR 20m via Bank of Cyprus Funded Risk Sharing Product for EUR 10m

First Loss Portfolio Guarantee for start-ups EUR 2m

First Loss Portfolio Guarantee for SMEs EUR 6m

= Total leveraged amount EUR 71m a leverage factor ofx4

Progress via Central Cooperative Bank EUR 16m

Status quo: portfolio of EUR 23m has reached over 400micro enterprises and SMEs, with EUR 64m still available


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4. Case study

Languedoc-Roussillon:

background South of France; borders: PACA, Rhne-Alpes, Auvergne, Midi-Pyrnes, Catalua

Main features

Inhabitants: 2.5m(10th region in France)

Demog. growth: 12.3% over last 10 years (1994-2004)vs 4.8% in France (1st region in France)

Unemployment rate in 2006 : 13% vs 9.5% in France

Only 96 firms (0.08%) with more than 200 employees

But :

Attractive region for innovation:

Infrastructures: scientific parks & incubators

Universities: medicine, biology; high level engineering schools

A region committed to support innovation:

World class clusters More than 7,000 researchers (highest density in France)

The most important growth of R&D expenses in France (more than 50% during

the last 3 years)


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4. Gap analysis: main

conclusions Debt:

Support the financing of innovative start-ups by

increasing the available resources in the segment

ofseed technological or innovative projects.

Equity:

Promote equity or quasi equity to support the

emergence of a small supply of financing for high-

potential SMEs.

Guarantee:

Facilitate SMEs access to finance more easily

(under better terms, both by means of lower

prices and/or lower collateral)


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4. JEREMIE LR: the

investment strategy

Inception Start up Development

Debt

Equity

Guarantee

Co-investment instrument

Funded Risk SharingSeed

Guarantee Instrument FLPG(First Loss portfolio guarantee)


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SMECashFlows

SME Development Stages

Pre-seed Phase Seed Phase Start-up Phase Emerging Growth

JEREMIE LREUR 27 m

Private moneyEUR 116m

Development

EUR 4m Seed loans forentrepreneurs/SMEs with an innovative

project.

EUR22m Co-investment for

SMEs with high potential ofgrowth.

Access to early stage equity funding &

support of development needs of

established companies through equity

Support of development needs of

established companies (mainly) through

guarantee products

Development of entrepreneurship

culture

Use of smart money instead of

grants

Support of innovative businessconcepts

4. JEREMIE LR: Product portfolio

EUR117m facilitate SMEs access to finance at

preferential conditions: finance the whole economy,reinforce competitiveness, face against unemployment.

4.3x portfolio multipliereffect


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4. JEREMIE : the implementation concept

Structural Funds

ERDF

JEREMIE Holding Fund LR (JHF): EUR 30m

EUR 15m

Contribution fromthe LR Region:

EUR 15m+

ERDF

Managing

Authority

Investment Board (COPIL): French State / REGION / EIF

Seed loans

Instrument:

EUR 2mLeverage of 2

i.e.

EUR 4m forLRs SMEs

Co-investment

Instrument:

EUR 11mLeverage of 2

i.e.

EUR 22m forLRs SMEs

Guarantee

Instrument:

EUR 14mLeverage of 8.4

i.e.

EUR 117m forLRs SMEs

i.e. a total ofEUR 143m forLRs SMEs

Holding FundManager(EIF)


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4. Progress achieved (end of October2012)Seed loans

62 entrepreneurs financed (for projects with a significant

component of innovation)

EUR 737 750 disbursed (JEREMIE part) EUR 1 475 500 total amount Leverage (direct): 2x

To be noted: First amounts are reimbursed to the JEREMIE HF

from the FIs

Co-investment Instrument 16 investments into SMEs with a high potential of development

EUR 3 750 000 invested directly by JEREMIE EUR 16 035 017 : total amount invested JEREMIE + Private co-investors

Leverage: 4.2x (expected at the beginning only 2x) To be noted: Significant interest from the private market ( included

VC firms based outside LR)

Guarantee Instrument 237 SMEs financed

EUR 24 299 926 : total loan amount disbursed to SMEs (coveredby JEREMIE)

Direct leverage : 8.4x

To be noted : Significant advantage passed onto LRs SMEs

(interest rate reduction + reduction of personal collateralrequirement)

TOTAL: 315 SMEs/entrepreneurs financed

EUR 41 810 443 disbursed to SMEs out of EUR 143m by end2015

Demand for credit in the

Euro zone and in France


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Contacts

European Investment Fund

96 boulevard Konrad Adenauer

L-2968 Luxembourg

www.eif.org

hubert cottogni, european investment fund

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