The European Investment Fund is pleased to announce that, following the signing ceremony that took place in Berlin, the ERP-EIF Dachfonds was officially launched. EIF is now set to actively begin investing in German high-tech venture capital funds under the ERP-EIF mandate.

Luxembourg, 1 March 2004 - Interest in the ceremony, organised by the German Venture Capital Association (BVK) to mark the launch of the Dachfonds, was overwhelming. More than 200 interested parties, including Members of the German Parliament, Ministry representatives, high representatives of the German Venture Capital Association (BVK) and the German Press, attended the event.

The ERP-EIF Dachfonds (ERP: European Recovery Programme) is a EUR 500m mandate for investments in venture capital funds focussing on Germany-based high-tech early stage companies. EIF will be managing the facility on behalf of the German Federal Ministry of Economics and Labour (BMWA) and ERP.

For the Dachfonds, BMWA will commit EUR 250 m from ERP resources, which will be matched by an EIF co-investment. The Dachfonds would have an investment period of up to 5 years and a divestment period of up to 10 years (3 times extendible for one year). The principal aim is to support the establishment and financing of specialised venture capital funds that focus on investments in early and development stage technology companies in Germany (seed, A and B rounds). The second focus is to provide finance for funds that ensure follow-on financing for high-tech companies (B and later rounds).

EIF will invest in funds that are managed by dedicated, professional and experienced teams. First-time teams may also be considered.

In carrying out Dachfonds investments, EIF will act as a pari-passu, cornerstone investor (with an average participation in a fund of 30%). EIF is a long-term, committed and pro-active investor, participating in line with market standards and acting as a commercial investor, seeking an appropriate return on its investments. EIF brings to the Dachfonds its recognised know-how and widespread network in the European venture capital industry, and may thereby play a catalytic role in fundraising for the funds in which it participates.

The funds benefiting from the ERP-EIF Dachfonds are not restricted to invest solely in German companies, although the main geographical focus of the investments should be in Germany.

The Dachfonds, which will be implemented in addition to EIF's on-going investments in Germany, is perfectly in line with EIF's investment approach and strategy for the region, and is also in accordance with EIF's Statutes and EU policy objectives.

In his presentation at the ceremony in Berlin, Dr. Matthias Ummenhofer, Head of the ERP-EIF Dachfonds team, explained that the Dachfonds would take participations of at least 10%, when investing in a venture capital fund, but the average participation in a fund will depend on market conditions. The aim is it to maximise the mobilisation of private capital to fully use the leverage effect of the ERP-EIF Dachfonds.

The launching of the Dachfonds was attended by the State Secretary of BMWA, Dr. Alfred Tacke, as well as by the Vice-President of the European Investment Bank, Mr Wolfgang Roth. Also present at the event were Dr. Holger Frommann, Managing Director of BVK and Mr Thomas Pütter, who is Vice Chairman of BVK.

In his speech, Dr. Tacke reiterated that innovation remains of utmost importance for the development of employment and is the basis of the venture capital market in Germany. One of the central problems is the lack of liquidity in the venture capital market, and this point is now specifically addressed by the ERP-EIF Dachfonds.

Similarly, Mr Roth spoke of the necessity for involvement of public sector money in the early-stage segment, adding, this new fund should not be considered as a subsidy vehicle, but as a professionally and commercially managed instrument.

The support of the high-tech sector is one of the top priorities of the German Government. BMWA plays a leading role in the realisation of this high-tech strategy, which will replace the existing State-funded promotion schemes for early stage high-tech companies.

EIF Chief Executive, Mr Francis Carpenter, highlighted that the ERP-EIF Dachfonds is the first mandate EIF will manage on behalf of a non-shareholder: The fact that BMWA has chosen EIF to implement the mandate, in a country as important as Germany, is witness that the EIF is a strong reference in the European VC market. It is a perfect example of partnership and I hope we can strike other mandates with public or private investors in other countries.