Graham Cope Head of Region, Northern Europe 22 June 2010 JEREMIE Holding Funds and Instruments JEREMIE Networking Platform This presentation was prepared by EIF. The information included in this presentation is based on figures available for May 2010 Any estimates and projections contained herein involve significant elements of subjective judgment and analysis, which may or may not be correct.
Agenda Overview of EIF-managed Holding Funds Overall Implementation Process & Progress Investment Strategies Similarities & Differences HFs Portfolio mix by Amount HFs Portfolio mix by Percentages Instrument Overviews Risk Capital Fund Seed & Start up Fund Co-Investment Fund Funded Risk Sharing Instrument First Loss Portfolio Guarantee Lessons Learned 1/ 17
EIF-managed JEREMIE Holding Funds Total JEREMIE Holding Funds: EUR 1.09 b 2/ 17
Overall Implementation Process Instrument design and Portfolio Strategy agreement Call for Expression of Interest Pre-selection of Expression of Interest received Invitation to negotiate to the preselected FIs Signature of Financial Agreement EIF Board Approval Commercial & Legal Negotiations Screening & Due Diligence Disburse-ments to s Monitoring Ongoing Risk Management Divestment 3/ 17
1,250m Value of signed Mandates 9 HFs 9 HFs 10 HFs 11 HFs 11 HFs 13 HFs 14 HFs 1,000m 750m 7 HFs 7 HFs 500m 250m 0m Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 35 Number of Calls issued 30 25 20 15 10 5 4/ 17 0 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010
80 Number of FIs reviewed 70 60 50 40 30 20 10 0 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 45 Number of Approved Transactions 40 35 30 25 20 15 10 5 5/ 17 0 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011
10 Number of signed Transactions 8 6 4 2 0 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 300m Holding Funds Commitments to FIs (Signed transactions) 200m 100m 6/ 17 0m Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011
Amount of Private Finance attracted 600m 500m 400m 214 300m 199 200m 100m 75 HFs HFs 0m HFs Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 7/ 17
Holding Funds Portfolio Mix (EURm) Lithuania 147 25 28 8 2 Bulgaria 74 21 60 45 Greece 60 30 10 Romania 60 35 5 Slovakia 29 32 21 8.5 10 Latvia 52 20 11.7 8 Campania 70 8.8 11 Sicily 45 8.8 6 Languedoc-R. 14 11 2 3 Cyprus 10 8 2 Malta 9 1 FRSP Microcredit Guarantees Risk Capital Fund Other Equity Other Items 20m 70m 120m 170m 220m 8/ 17
Holding Funds Portfolio Mix (in %) Lithuania Bulgaria Greece Romania Slovakia Latvia Campania Sicily Languedoc-R. Cyprus Malta 0% 25% 50% 75% 100% FRSP Microcredit Guarantees Risk Capital Fund Other Equity Other Items 9/ 17
Instrument Overviews Types of Instruments already live Risk Capital Fund (RCF) Seed & Start up Fund (S&SF) Co-Investment Fund (CIF) Funded Risk Sharing Instrument (FRSI) Types of Instruments soon to be live First Loss Portfolio Guarantee (FLPG) Other Instruments under consideration FRSI for Microfinance institutions FLPG for Mezzanine finance providers FLPG for Start-up finance providers 10 / 17
Risk Capital Fund JHF EUR 14 m allocated Private Investment EUR 6 m Risk Capital Fund (Limited partnership) - Upside Incentivisation - No Downside protection - Professional Management Focus on high growth sectors 11 / 17
Seed & Start-up Fund EUR 3m allocated JHF EUR 11.7m allocated Private Investment EUR 5.7 m Seed Fund Risk Capital Fund (Limited partnership) - Upside Incentivisation - No Downside protection - Single Professional Management University Spin out focus 40-50 projects Innovative Technologies focus 14-16 s 12 / 17
Co-Investment Fund JHF EUR 8 m allocated Fund Managers EUR 0.4 m Co-Investment Fund (Limited partnership) Co- Investors EUR 0.2m EUR 0.2m Co-investment process Can be focussed on business angels 13 / 17
Funded Risk Sharing Instrument (FRSI) EUR 10 m allocated JHF 1. Deposit to Bank(s) JEREMIE Resources EUR 10 m Deposit acts as 50% co-financing Combined with Bank s own resources EUR 10 + 10 = 20 m 2. Loans to s 14 / 17
First Loss Portfolio Guarantee New Portfolio New Portfolio Stimulates EUR 60m of new lending Example Multiplier of 6* Guarantee: 80% up to the cap rate 20% Guarantee: 50% up to the cap rate 33% EUR 10m From JHF EUR 10m From JHF 15 / 17
Lessons Learned JEREMIE is all about tailor-made portfolios to address market failures in each region or Member State However, there is a need for speed Hence, trade-off exists that MA s must recognise Tailor-made vs. Standardisation Market practice vs. Country specifics Regulations vs. Financial Intermediaries willingness Implementing JEREMIE is more of an art than a science But it is happening in reality and impacting s But we must seek to improve many aspects before the next Framework Period 16 / 17
Contact European Investment Fund 96, boulevard Konrad Adenauer L-2968 Luxembourg Graham Cope g.cope@eif.org www.eif.org 17 / 17