We are the bridge between policy makers and market players

This article was first published in the Luxembourg Private Equity Association’s magazine Insight/Out # 27 featuring a multifaceted cover dossier on the European Investment Fund (EIF) and the in-depth interview below with Chief Executive Marjut Falkstedt.

First, let me say it was an honour to be appointed EIF Chief Executive on 1 January 2023 – whilst since then the European venture capital and private equity space has been undergoing a multitude of ‘stress-tests’.

At the EIF, we believe these are part of a natural market correction – but we are attentive to the challenges and opportunities of the current investment landscape. Our annual VC and PE survey results (publishing in early October) will reveal more about the market sentiment across Europe, which I look forward to reviewing.

Internally, together with the management team we want to shape an EIF that encourages teamwork, collaboration, diversity. Where we look at our footprint and walk the talk when it comes to EU policies and values. The EIF’s digital transformation is also a priority, staying at the forefront of innovations we are known to support.

The EIF’s role has always been – and I can reassure you that it will remain – to listen, identify and pro-actively tackle market gaps and pursue EU policy priorities.

We intend to be an agile facilitator between policy and markets. We want to continue as an active ecosystem developer and leverage our expertise to make Europe more competitive and ‘future-proof’.

Since the EIF’s establishment in 1994, we’ve been the SME-financing-arm of the European Investment Bank (EIB) Group. We will continue this work: funding innovation, digitalisation, sustainability, social inclusion, culture, and more.

But the environment is moving fast around us, and we are constantly thinking about adapting our strategic orientation accordingly.

Empowering equity – getting more funding to women fund managers and mixed teams; and turning towards more (green) infrastructure related investments are among the tasks on our radars.

Our investment focus is also adjusted in conjunction with the priorities of the EU and the EIB Group as we support the objectives of both institutions.

EIF results for 2023 are on track. Beyond the numbers, we want to be perceived as relevant by the market. The demand for EIF support has remained high under both our equity and guarantee activities.

The signals we get indicate that fundraising is difficult for everyone now, including both established and emerging teams – which may speak in favour of an increased EIF role in the market, if needed. At the same time, we are fundraising ourselves for existing and new initiatives, whilst sharpening our impact methodology.

For our European Tech Champions Initiative (ETCI), and for our investment initiative targeting institutional investors (AMUF) advised by the EIF, we are welcoming commitments from EU Member States and pension funds / corporates, respectively.

As an organisation, the EIF has grown substantially in recent years, now counting around 700 staff members.

Specialisation could be one, in my view. Considering the macro-economic context and looking at how our strategic orientation has shifted from a volume-driven approach to policy objectives, I think having a vision and sticking to it could be the make or break for many in the European VC and PE industry today.

Examples are gender-focused strategies and climate-related solutions, just to name two that are on my personal wish list – and where EIF teams have been seeing good investment proposals recently.

Backing Europe’s tech sovereignty through investments in deep tech and disruptive innovations (AI, space, semiconductors, defence, cybersecurity, blockchain, or quantum computing) has gained considerable importance.

I like to mention social impact investments too, where the impact is as important as financial return. I want to believe that each of us can contribute to a greener and more inclusive Europe. 

As we are celebrating the EIF’s 30-year anniversary, this is an opportunity to look at the success of helping over 2 million small businesses with access to finance. But also an occasion to reflect on where we can do better. This might entail an adjustment of our product offering and some of our focus may shift.

Either way, we aim to complement – rather than overlap – our financing activity with national promotional institutions and other key partners of the EIF. We could increase our local presence across Europe, getting closer to the markets and entrepreneurs we are looking to support.

Delivering on our flagship InvestEU mandate and keeping our tech champions on home ground are two priorities firmly pinned to the top of our strategy. ‘Made in Europe’ should not be a buzzword, but a reality that we created by closing the funding gap for our startups and scaleups.