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Graham Cope Head of Region Brussels, 30 November 2010 Selection Process of a Financial Intermediary.

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Presentation on theme: "Graham Cope Head of Region Brussels, 30 November 2010 Selection Process of a Financial Intermediary."— Presentation transcript:

1 Graham Cope Head of Region Brussels, 30 November 2010 Selection Process of a Financial Intermediary

2 1 1 Agenda EIF expertise in selecting intermediaries EIF experience within JEREMIE The key principles Main process – The Call for Expression of Interest Main process – Selection & Approval Conclusions & Lessons Learned

3 2 2 Since its foundation, EIFs core role has been selecting and then transacting with financial intermediaries EIF expertise in selecting intermediaries KEY FACTS Years since foundation 16 Venture Capital transaction numbers 354 Guarantee & Securitisation transaction numbers 285 Number of countries selections made in VC - 26 G&S - 30 Approx. number of Financial Intermediaries reviewed 2635 Approx. number of Due Diligence missions mad 600

4 3 3 Venture & Growth Capital Portfolio 4.6bn Net Equity Commitments across Europe at 30.09.2010 Austria 54 Belgium 68 Bulgaria 2 Cyprus 4 Czech Republic 35 Denmark 93 Estonia 6 Finland 104 France 707 Germany 532 Greece 16 Hungary 13 Ireland 89 Italy 257 Latvia 40 EU 27 EFTA/EEA EU Candidate Countries Lithuania 41 Luxembourg 32 Malta 8 Netherlands 69 Norway 34 Poland 55 Portugal 59 Romania 28 Slovakia 5 Spain 285 Sweden 250 Switzerland 56 Turkey 118 United Kingdom 1037 Other & Non EU 468 EUR m

5 4 4 13.6bn in Outstanding Guarantee Commitments across Europe at 30.09.2010 EU 27 EFTA/EEA EU Candidate Countries Other Countries Guarantees and Securitisation Austria 294 Belgium 367 Bulgaria 145 Cyprus 1 Czech Republic 141 Denmark 244 Estonia 16 Finland 212 France 1790 Germany 1122 Greece 84 Hungary 55 Ireland 3 Italy 4580 Latvia 37 Lithuania 40 Malta 1 Netherlands 736 Norway 7 Poland 488 Portugal 243 Romania 53 Serbia 50 Slovakia 25 Slovenia 89 Spain 1542 Sweden 359 Turkey 183 United Kingdom 400 Other & Pan EU 476 EUR m

6 5 5 JEREMIE is relatively new, but EIF process is almost identical EIF experience with JEREMIE KEY FACTS Years since start of JEREMIE 4 Number of VC applications received 86 Number of G&S applications received 42 Combined Number of DDs undertaken 28 Number of approved transactions 19 Number of Countries involved 10

7 6 6 Being a Community body with the express statutory purpose to contribute to the pursuit of Community objectives (cf. Article 2/1of the EIF Statutes), the Fund, in its dealings with economic operators, is committed to respecting the following fundamental EU principles regarding public procurement:- Transparency; Equal Treatment; Non-discrimination and Confidentiality. EIF launches calls for expression of interest, in accordance with Commission Regulation 1828/2006 setting out the rules for the implementation of Council Regulation 1083/2006 of the European Parliament and of the Council of Structural Funds. Our Processes, Procedures and Practice are designed and implemented to respect these principles and rules. Key principles – EIF and JEREMIE

8 7 7 Main Process: the call for expression of interest Progress Process Fact finding Instrument design Internal approval Selection criteria Inv. Board approval State aid assessment Publication Q & A process Call deadline Follow-on from gap analysis, discussions with key market players and associations Expert driven process to specify product details, to meet market needs whilst respecting regulations Internal review and approval process including specialists from legal, risk management & compliance Monitoring committees approval of a specific selection criteria Full presentation of product and call documents to local IBs Formal state aid assessment by competent local authorities Website and other media to ensure market awareness Ensuring answers are communicated to all

9 8 8 Main Process: selection and approval Progress Process Draft board report Eligibility check Selection Panel Pre-selection phase Set up of due diligence Final Selection Due diligence Board submission/approval Call deadline To FI, mandator and media as appropriate Initial check to ensure EoI passes eligibility checklist with support of compliance Internal agreement of members and observers of core selection team Desk-based review of submitted documents with initial scoring (QAC) and then team review (minuted) Invitations to 2 nd screening issued & DD team formalised Presentation of FIs to DD team in loco, scores reviewed & minuted Short-listed applicants undergo intensive 2 day interview process Proposal presented to EIF Board for approval Communication of decision Preparation of decision documents reviewed by all depts.

10 9 9 Selection process – other aspects Reserve List process (in case transactions fail in negotiation) Rules set in place in case of need Rejection reasons explained upon request Complaint procedure EIB Group process published on website Coordinated separately by EIF Compliance Explanation of choice to mandator Investment Board understanding/support/approval Zero tolerance for political interference Added Value of Process Objectivisation of selection Mitigation of politically motivated selection

11 10 Conclusions & Lessons Learned Conclusions Principles must always be applied Experience brings capability and confidence Quality of decision-making process takes time A selection decision is like a marriage Lessons Learned Remember this is a human process, not just numbers Try to use failure as a learning opportunity Quick/poor selection decisions can be very costly Good decisions encourage private investors to participate

12 11 Contact European Investment Fund 96 boulevard Konrad Adenauer L-2968 Luxembourg Regional Business Development Tel.: (+352) 42 66 88 1 Fax: (+352) 42 66 88 200

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