EIB Risk Capital Resources (RCR)

Within the EIB Group, EIF’s cooperation with the EIB is enhanced through the implementation of the EIB’s mandates. The EIB Risk Capital Resources (RCR) mandate is the core pillar of EIF’s equity activity and is a critical resource that has enabled EIF to pursue its equity strategy in the venture capital and growth segments for more than 15 years. Under RCR, EIF co-finances with its own funds.

The RCR mandate has also opened the scope of EIF’s activities to new segments and given EIF opportunities to reach additional final beneficiaries, such as midcaps, bridging market gaps which were not supported with existing instruments whilst complementing EIB’s current midcaps product offering.  RCR capacity is also successfully used to invest directly in vehicles and cornerstone structures.

At the end of July 2015, EIB provided further EUR 2.5bn from its own contribution to EFSI in order to increase the RCR mandate from EUR 7.5bn to EUR 9.5bn. RCR currently provides EUR 9.5bn to support technology and industrial innovation and targets early to lower mid-market funds that specifically focus on the enlarged Europe (EU-28, EU candidate, potential candidate and EFTA countries) and on SMEs and midcaps. Such sectors include information and communications technology as well as life sciences, especially in areas such as pharmaceutical manufacturing, medical biotechnology, medical devices or agricultural chemicals. Growth and lower-mid-market activities have a more general focus and traditionally extend across a wide range of economic activities.

Under the RCR mandate, EIF increased investments in investment funds that target early to lower mid-market segments, including the provision of equity as well as hybrid debt/equity financing. These additional resources enabled EIF to deploy its support under EFSI at a higher and faster rate than initially anticipated, and to increase its response to a very strong market demand. 

At the end of 2015, RCR’s total outstanding volume amounted to EUR 6.7bn, committed directly in over 400 funds and mobilised over EUR 42bn of total investments. Against this background of strong market demand, EIF played an instrumental role in attracting participation from private sector players and institutional investors. Capitalising on its catalytic role and best practices, EIF aims to direct funding to enterprises which can generate significant added value in the European economy, but which would otherwise remain insufficiently financed by commercial banks alone.

Mezzanine Co-Investment Facility (MCIF)

One of the complementary tools under RCR (launched at the end of 2014) is the Mezzanine Co-Investment Facility (MCIF). This EUR 100m hybrid debt-equity facility enables EIF to co-invest in target companies alongside mezzanine funds supported under the debt-equity window of RCR. MCIF widens the spectrum and leverages the efficiency of EIF’s risk finance support for SMEs and midcaps, thereby enhancing their access to finance. 2015 marked its  first full operational year.
By year-end 2015, commitments under MCIF totalled EUR 51.7m promoting a broader utilisation of co-investment solutions and addressing clearly identified fundraising shortfalls.