Basic HTML Version
Annual Report 2011
28
General overview
Regional business development involves the acquisition and
management of third party mandates entrusted to EIF by the
national or regional authorities in the Member States and
countries with prospective EU membership. As the manager
of JEREMIE Holding Funds, regional funds-of-funds and IPA
funds, EIF brings its expertise and value-added in terms of
capacity building and know-how transfer.
EIF primarily manages Holding Funds established under
the JEREMIE initiative, a joint initiative of the EC, EIF and
EIB to promote SME access to finance and financial engi-
neering products in European regions. The initiative offers
EU Member States, through their national or regional man-
aging authorities, the opportunity to use part of their EU
structural funds to finance SMEs by means of equity, loans
or guarantees, through a revolving holding fund acting as
an umbrella fund. It operates as a “tool -box” to create,
through selected local financial intermediaries, financial
instruments for the benefit of micro, small and medium-
sized enterprises.
Similarly, the Instrument for Pre-accession Assistance (IPA),
offers assistance to countries engaged in the accession to
the EU process. Assistance is provided on the basis of the
European partnerships of the potential candidates and the
accession partnerships of the candidate countries. Finan-
cial engineering for regional development and support
for SMEs and innovation is a specific measure under IPA.
2011 was a significant year for EIF. JEREMIE Holding Funds
began to have a real impact at SME level in several Mem-
ber States, mainly due to the increase in the number of
transactions with financial intermediaries. The implementa-
tion of the first instruments for IPA also started in 2011. At
the same time, 2011 marked the completion of the invest-
ment period of two of EIF’s fund-of-funds activities – namely
iVCi in Turkey, and NEOTEC in Spain – with PVCi’s activity
ongoing. In addition, a second IPA mandate in Turkey, the
EUR 16m G43 Anatolian VC Fund Project as well as new
mandates in the Provence-Alpes-Côte d’Azur (PACA) re-
gion of South East France and the Calabria region of Italy
were signed, with respective commitments of EUR 20m and
EUR 45m.
EIF currently manages 16 mandates under JEREMIE and
IPA for a combined total of EUR 1.3bn and has signed
transactions with 27 new financial intermediaries in the
regions served. Through the JEREMIE Holding Funds, a
total amount of EUR 1.4bn has been catalysed and this
figure is expected to rise to EUR 3bn by the end of 2012.
EIF’s regional business development
activities
In managing regional business development, EIF aims to
use its expertise and experience to create market impact
through considered local implementation of financial
instruments utilising EU structural funds, other national
government, regional or local resources, and third party
funds. This involves working closely with local stakehold-
ers to tailor respective investment strategies according
to the needs of the market and to implement them via
selected financial intermediaries.
First results are materialising at the level of the SMEs, as
evidenced by a growing number of investment loans be-
ing made by the financial intermediaries to the SMEs.
Both the JEREMIE and IPA instruments are designed to
encourage private sector involvement by engaging the
intermediaries in contractual arrangements that combine
a commercial approach with policy objectives and that
ensure a full alignment of interests. The instruments include
equity investments through venture capital fund manag-
ers, often focussed on the earlier stage investment rounds
Regional business development
“With the support of initiatives such as JEREMIE, being
committed to promote regional development and
entrepreneurship, we are able to provide investment
into Lithuanian SMEs early in their growth stages and
at the time when they need it most.”
Šarūnas Šiugžda, Founder and Managing Partner, LitCapital
“JEREMIE has provided us with adequate risk
protection which enables us to offer SMEs bet ter
access to finance at attractive terms and contribute to
their growth, innovation and job creation.”
Charles Borg, CEO, Bank of Valletta