Page 28 - Annual Report 2010

ANNUAL REPORT 2010

26

Overview of joint ventures and funds-of-funds

In the first 1.5 years since inception, the LfA-EIF Facility has been successfully ramped up and already achieved major objectives: besides supporting one emerging fund manager, investments of the Facility have been decisive in several funds reaching viable first closing sizes and have been critical in three fund management teams establishing local presence.

As of end of 2010, the LfA-EIF Facility has commit ted some EUR 26m in four funds, of which one commitment (EUR 5m) is still conditional. It is now 52% committed.

Istanbul Venture Capital Initiative (iVCi)

Founded in 2007, Istanbul Venture Capital Init iat ive (iVCi) is the first and only dedicated fund-of- funds and co-investment program for Turkey. A successful example of a national-international and public-private partnership, it had its final closing at EUR 160m in March 2009 with the participation of six investors: SME Development As-sociation of Turkey (KOSGEB), Technology Development Foundation of Turkey (TTGV), Development Bank of Turkey (TKB), National Bank of Greece Group (NBG Group), Garanti Bank of Turkey and EIF.

Since the launch of iVCi, EIF has evaluated over 25 fund proposals targeting Turkish fund managers, six of which were approved by the iVCi Investment Committee. So far, two of these investments have been signed for total com-mitments of EUR 21m. This amount will be match-funded by third party investors resulting in over EUR 50m of equity re-sources being deployed for investments into Turkish SMEs.

In 2010, EIF organised two Strategic Network Meetings as part of the iVCi Strategic Network Platform which gath-ers together prominent representatives from the PE & VC industry to discuss important issues related to the devel -opment of the PE & VC in Turkey. Topics for discussion include the Regulatory Environment in Venture Capital and Private Equity, and the Establishment of a Turkish Private Equity / Venture Capital Association.

Through its joint ventures and funds-of-funds activities, EIF made a decisive impact on SME finance availability on a wide geographical scale:

ERP-EIF Dachfonds

The ERP-EIF Dachfonds is a fund-of- funds investing in venture capital funds focusing mainly on German-based, high-tech early and development stage companies. EIF manages this co-investment facility on behalf of the Ger-man Federal Ministry of Economics and Technology (BMWi) and the European Recovery Programme (ERP), which commit ted 50% of the Facility, matched by co-investments from EIF, EIB and EU resources.

ERP-EIF Dachfonds has established itself as one of the most important pillars of the German VC market. Assert-ing its role of cornerstone investor, it backed experienced teams as well as promising emerging teams and was of ten instrumental in many funds reaching viable first closing sizes. As a result of its successful implementation - originally launched at a total volume of EUR 500m – the Dachfonds was increased in May 2010 to EUR 1bn by the BMWi and the EIF.

In 2010, the ERP-EIF Dachfonds committed EUR 120m in four funds, three of these commitments (EUR 90m) still be-ing conditional. The ERP-EIF Dachfonds is currently 64% committed with signatures and conditional commitments totalling EUR 642m in 20 funds.

LfA-EIF Facility

Signed in May 2009, LfA-EIF supports venture capital funds which focus on the Bavaria region of Germany, and which target high-tech early and development stage companies. EIF manages this co- investment facility on behalf of the LfA Förderbank Bayern, which provided EUR 25m matched by co-investments from EIF, EIB and the EU.