Mitä uutta eurooppalaiset rahoitusvälineet tarjoavat suomalaisille rahoitusalan toimijoille? Eurooppalaisten rahoitusvälineiden hyödyntäminen yritysten ja hankkeiden rahoituksessa Helsinki 8.12.2016 Jukka Luukkanen Head of Helsinki Office European Investment Bank 1
The EIB Group Providing finance and expertise for sound and sustainable investment projects Leading developer of risk financing for innovative SMEs 08/12/2016 European Investment Bank 2
EIB at a Glance We are the world s largest International Financial Institution 1958 Established to support long-term investments primarily in the European Union. We have over 50 years experience in financing sustainable projects. Shareholders Owned by the 28 Member States of the European Union. Source of funds We raise long-term funds on the international capital markets and as a non-profit organisation we pass favourable borrowing conditions to our clients. AAA-rated We re triple-a rated by all major rating agencies and have a sizeable capital of 242.4 bn. 08/12/2016 European Investment Bank 3
The EIB Group in 2015 EIB in 2015: EUR 77.5bn Record for the EIB Group: EUR 84.5bn EIF in 2015: EUR 7bn 08/12/2016 European Investment Bank 4
KEY PRIORITIES - 2015 ENVIRONMENT INFRASTRUCTURE INNOVATION SME EUR 19.6bn EUR 18.9bn EUR 18.7bn EUR 29.2bn 08/12/2016 European Investment Bank 5
SME financing 6
Helping SMEs at every stage of their lifecycle Public Stock Markets Portfolio Guarantees & Credit Enhancement Formal VC Funds & Mezzanine Funds Social Impact Funds VC Seed & Early Stage Microcredit Business Angels, Technology Transfer PRE-SEED PHASE SEED PHASE START-UP PHASE EMERGING GROWTH DEVELOPMENT SME Development Stages HIGHER RISK LOWER RISK 7
New EU Programmes helping SMEs at every Stage Guarantees & Debt Programmes Equity Programmes Public Stocks EIB InnovFin products EFSI Equity Expansion & Growth COSME Equity Facility for Growth InnovFin SME Guarantee SME Initiative COSME Loan Guarantee Facility Cultural and Creative Sector Guarantee Facility* EFSI Equity InnovFin Equity EaSI (Employment & Social Innovation) ERASMUS+ Student loans InnovFin Tech Transfer PRE-SEED PHASE SEED PHASE START-UP PHASE EMERGING GROWTH DEVELOPMENT SME Development Stages HIGHER RISK LOWER RISK 8
3 ways to tackle the investment gap Investment Plan for Europe Mobilise finance for investment European Fund for Strategic Investments Cooperation with National Promotional Banks Support investment in real economy European Investment Advisory Hub European Investment Project Portal Create an investment friendly environment Improving the regulatory environment Structural reforms Aim: to mobilise at least 315 billion in investment across the EU 9
European Fund for Strategic Investments (EFSI) Increased to EUR5,5bn Increased to EUR82,5bn 10
EFSI SME Window Resources & Objectives EUR 2.5bn provided by EIB EUR 3bn guarantee cover provided by EFSI - Accelerated and additional financing support to SMEs and mid-caps - Removing market gap EUR 82.5bn of investments at SME and mid-caps level 11
EU Equity mandates Overview EU EQUITY MANDATES ~ 2.5 bn Single EU Equity Instrument EFSI Equity Instrument COSME EFG 500m InnovFin Equity (IFE) 1bn EFSI Expansion & Growth 1bn EU 28, Iceland, Montenegro, Turkey, FYROM, Albania, Serbia Single EU Equity Call for EoI EU 28, Norway, Albania, Bosnia and Herzegovina, FYROM, Montenegro, Serbia, Turkey, Israel, Moldova, Faroe Islands, Ukraine, Georgia, Armenia, Tunisia, EU 28 EFSI Equity Instrument Call for EoI
Basic features Stage coverage Early Stage focus Pre-seed, seed, start up phases (seed & A rounds included) Focus on Horizon 2020 objectives (e.g. ICT, life sciences, clean energy) Investment size up to EUR 50m Pari-passu, at least 30% investment from private investors Up to 25/50% of total commitments x2 of investment ticket in eligible investees EU + Horizon 2020 Associated Countries Call for Expression of Interest PRE-SEED PHASE PRE-SEED PHASE PROOF OF PROOF CONCEPT OF SEED PHASE START-UP START-UP PHASE PHASE EMERGING EMERGING GROWTH GROWTH DEVELOPMENT SME Development Stages 13
CO-INVESTMENTS EFSI Equity Instrument Themes Social impact BAs TT VC FUND OF FUNDS 14
EIF s assessment Investment readiness Team and Track Record (WHO) Adequate skill-set Track-record Cohesion /stability/succession Carry split Team commitment Governance structure: independence/ conflict of interests Reputation (referencing) Market Opportunity (WHY) Deal flow/pipeline Competition Investment Strategy (HOW) Focus, deal flow and pipeline Value creation / Unique Selling Point Coherence with the market opportunity, the team and the fund parameters Fund Parameters (WHAT) Fund model: fund size / diversification / reserve policy / investment pace Terms and Conditions Management company budget Legal structure / compliance Countries covered Stage of investments Sectors covered Eligibility Eligibility fit Policy Fit Internationalisation Multicountry focus Countries with VC activity below average Catalytic role EU Value Added Value creation Market developme nt Special focus areas: BA, TT, social enterprises Countries with below average VC activity 15
What are the loan amounts under EFSI? According to EFSI regulation no specific minimum but lending practice at EIB Group requires best use of resources Indicative values for different financing operations Long term unsecured loans: from EUR 25m Junior subordinated loans: from EUR 12m Mezzanine and equity products: from EUR 7.5m Intermediated EIB operations: various EIF lending via financial intermediaries: up to EUR 7.5m* *COSME programme: up to EUR 150,000 InnovFin initiative: up to EUR 7.5m 16
Direct/Indirect Equity-Risk Finance under EFSI QE Quasi-Equity finance for SME/Mid-Caps 1.0bn RS Risk Sharing for Corporate Innovation 0.8bn CI Co-Investments 0.5bn
European Growth Finance QE Direct quasi-equity debt financing for SMEs and MidCaps Indicative Term Sheet Illustration Borrower Instruments Purpose Co-investment Investment Amount Tenor Availability Pricing Covenants Security Fees Appraisal up to 3,000 employees Debt and quasi-equity instruments Future investment budget (usually double the amount sought from EIB, cumulative, over a period of three years) EIB finances maximum 50% of eligible project costs, co-investment with third-party sources or own resources EUR 7.5m EUR 60m Usually 5 to 7 years after drawdown Up to 1 to 2 years after signature In-kind interest, profit sharing, warrants, and other equity kickers, etc, in combination with standard cash interest Case-by-case basis Un/Secured Certain fees applicable Usually between 3 and 5 months Assets Eligibility Balance Sheet: SME or MidCap Company Senior Debt Junior Debt Equity The Eligible companies need to demonstrate that they have: Raised equity in the past (different rounds) Stable and experienced management team Professional corporate governance and code of conduct Sustainable business model, business plan and strategy providing credible growth perspectives Sustainable capital structure
European Growth Finance (example product comparison) Terms Venture loan EIB Growth Finance Bank Term Loan Size EUR 1.0 EUR 15.0 EUR 7.5m EUR 60m EUR 10m EUR 100+ Maturity Up to 3 years 5 + years 5 + years Availability Immediate Up to 2 years Up to 1 year from signature Fees Various plus cost cover No fees / Cost cover Various plus cost cover Security Secured Un/Secured Un/Secured Ranking Senior Senior / Subordinated Senior / Subordinated Prepayment/Cancellation Subject to penalties Small or no fees Subject to penalties Interest Cash + PIK+ Kickers Cash + PIK+ Kickers Cash interest Equity elements Conversion/Kickers Kickers N/A Governance / Control Yes No No Options (put/call) Yes Yes No Traded Potentially No Yes
MidCap Growth Finance (quasi-equity risk) Software Search engine Software Fiber optic networks Electronics Data Centers 3D printers Finland France The Netherlands England France Sweden The Netherlands 15 million 25 million 13.5 million 25 million 12 million 7.5 million 10 million 11/09/2015 23/12/2015 22/01/2016 17/12/2015 11/04/2016 20/05/2016 04/07/2016 Biotech Biotech equipment Biotech Medical Equipment Food production Biotech Disease diagnostics Germany Portugal Germany Finland Greece France Finland 25 million 12 million 10 million 8 million 15 million 20 million 15 million 27/03/2015 27/11/2015 02/12/2015 18/03/2016 06/05/2016 21/12/2015 13/07/2016 Fiber optic networks Waste collection Vaccines Flexible displays Insurance software ecommerce software HIV Testing UK Finland France Finland Ireland Finland Sweden 25 million 15 million 25 million 12 million 15 million 8.5 million 10 million 08/07/2016 11/07/2015 12/07/2016 13/07/2016 22/06/2016 22/06/2016 10/07/2015
Results dashboard 21
08/12/2016 European Investment Bank 22