Commission and EIF seek Pan-European Venture Capital Fund-of-Funds managers
On 8 November 2016 the European Commission and the European Investment Fund (EIF) invited applications for setting up and managing one or more private-sector led, market-driven Pan-European Venture Capital Funds-of-Funds.
Venture capital (VC) plays a key part in supporting growth and offering entrepreneurs an option to raise funding in Europe as well as overseas. However, Europe's VC funds are relatively small, and EU VC investment is largely concentrated in a few Member States. A Pan-European VC Fund-of-Funds can help increase the scale of VC funds in Europe and the industry's footprint across all Member States, as well as attract private investors. As part of the Capital Markets Union (CMU) Action Plan, the new Pan European VC Fund-of-Funds supports the aim to unlock market-based finance for SMEs and increase cross-border investments.
Carlos Moedas, Commissioner for Research, Science and Innovation, set out his ambition to create a Pan-European VC Fund-of-Funds in June 2015, and launched the call for applications at the Web Summit in Lisbon.
The EU will provide cornerstone investments of up to €300 million in one or more independently managed VC Fund-of-Funds, up to a maximum budget of €400 million 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, which is a major boost, as the total of VC funds raised last year in the EU was €5 billion. The EU investment combines resources from Horizon 2020's InnovFin Equity scheme (up to €200 million), EFSI (up to €100 million) and COSME (where up to €100 million is foreseen).