EC-EIF - Pan-European Venture Capital Fund-of-Funds, call for managers
The European Commission and the European Investment Fund (EIF) are inviting applications for setting up and managing one or more private-sector led, market-driven Pan-European Venture Capital Funds-of-Funds
Pan-European Venture Capital Funds-of-Funds
The Pan-European VC Fund-of-Funds is a priority action under the Commission's Capital Markets Union (CMU), and complements other actions to boost VC in Europe, notably proposed expansion of the European VC Funds (EuVECA) regulation and proposals to address the bias in the tax system towards debt over equity. It was first promoted by Commissioner Moedas in his June 2015 speech 'Open Innovation, Open Science, Open to the World'.
The EU will provide cornerstone investments of up to 300 million of euros in one or more independently managed VC Fund-of-Funds, up to a maximum budget of 400 million of euros for all Fund-of-funds. The selected fund manager(s) must raise at least three times as much from other sources (the EU investment is capped at 25%). This means additional investments to VC of around 1,6 billion of euros, which is a major boost, as the total of VC funds raised last year in the EU was 5 billion of euros. The EU investment combines resources from Horizon 2020's InnovFin Equity scheme (up to 200 million of euros), EFSI (up to 100 million of euros) and COSME (where up to 100 million of euros is foreseen).
The objectives of this initiative are to:
- Increase the size of VC funds in Europe: the average VC fund size is around €60 million compared to €120 million in the USA, which means that companies cannot raise larger follow-on investments in Europe.
- Increase private investment in VC: currently, public funding represents over 30% of the total VC investment in Europe, which is much higher than in the USA. At least 50% of investments raised by the Fund-of-Funds must be from private capital, and the Fund of Funds will be independently managed.
- Overcome fragmentation: most VC funds now only operate in one Member State. The Fund-of-Funds must operate across at least five European countries.
Call for Expression of Interest
The objective of this Closed Call for Expression of Interest is to select interested fund-of-funds promoters under the Pan-European VC Fund-of-Funds Programme, using resources of the Horizon 2020 InnovFin Equity facility, EFSI Equity Instrument and COSME Equity Facility for Growth, as appropriate.
The Call is addressed and restricted to interested parties that wish to establish and manage or advise a Fund-of-Funds to be financed under the Programme, on the terms set out in this Call. The applicants, or relevant entities set up for that purpose by the applicants, shall act as the Fund-of-Funds’ manager/general partner or advisor (jointly referred to as the “Fund-of-Funds Promoter(s)”). A Fund-of-Funds Promoter may be an individual, a group of individuals, individual company or group of companies. In either case a single application shall be submitted with respect to a single Fund-of-Funds investment proposal. Fund-of-Funds Promoters may only be selected once with respect to a single Fund-of-Funds investment proposal.
The deadline for applications is 31 January 2017.