EIF joins units and expand team

By bringing together impact investments with VC and business angels and tech transfer, Grabenwarter said he had brought four business lines into one unit and recruited seven investment professionals to take his new team to 40.

The European Investment Fund (EIF), a state-owned asset manager through its European Investment Bank parent and the biggest limited partner in venture capital funds, is more than half way through the recruitment of a larger team as part of a reorganisation of four business lines into one unit.

Since October, Ulrich Grabenwarter, head of investments - technology and innovation, has overseen EIF’s activities in impact investing, university and public research institute technology transfer, venture capital and business angel support.

He replaced Matthias Ummenhofer,
EIF’s former head of venture capital
 (VC), who left to set up alternative investments manager Mojo Capital.

EIF operates a fund of funds for venture capital and private equity fund investments in Europe with €9bn ($15bn) under management and commitments to more than 350 funds.

Grabenwarter was previously head of strategic development - equity - and of development impact and social investing for two years, where he had been building the first pan-European fund of funds for investing in social impact and social venture funds.

By bringing together impact investments with VC and business angels and tech transfer, Grabenwarter said he had brought four business lines into one unit and recruited seven investment professionals to take his new team to 40. He said he was looking to hire five more investors as the EIF expanded its operations in both equity and guaranteed investments.

Joining up the four lines covers some of the main groups helping entrepreneurs as some of the gap left by the slump in VC investment after 2008 has been filled in by business angel activity in recent years, according to EIF research.

Figures from the trade body, European Private Equity and Venture Capital Association (EVCA), soon understood from three sources to be renamed Europe First, found last year VC investments increased by 4.2% to €3.6bn as investments with a focus on the startup (+4.1% to €1.86bn) and later stage (+5.9% to €1.62bn) more than offset the decrease in seed investments (–16.5% to €99.6m). EIF market insight has found a number of VC-backed companies in the early-stage segment that show increasing revenues and are now achieving profitability.

However, as divestments in the VC segment decreased and VC fundraising also decreased in 2014 there are concerns about the longer-term health of the market. According to the EVCA figures, government agencies accounted for 35% of total VC fundraising in 2014.

Overall, credit guarantees are the most widely used policy instrument to ease SME access to finance and to alleviate related market failures and, as Grabenwarter said, undergoing “a very remarkable increase”.

Last week, the EIF and Banque Internationale à Luxembourg (BIL) agreed to increase lending to innovative small and medium-sized enterprises (SMEs) in Luxembourg.

This was the first transaction in Luxembourg to benefit from the support of the European Fund for Strategic Investments (EFSI), a programme set up by the new president of the European Commission using the EIB and its EIF subsidiary to allocate more resources to companies and infrastructure.

BIL will provide €60m to innovative companies in Luxembourg over the next two years as loans on favourable conditions backed by a guarantee of the EIF.

In the EIF’s European Small Business Finance Outlook published in June, Helmut Kraemer-Eis, heads EIF’s research and market analysis, found difficulties in accessing finance moved down from being the fifth to the sixth most pressing problems for euro area SMEs compared to the previous survey round even though the trend in lending to non-financial corporations (NFCs) in Europe declined again..

And significant disparities in access to finance by country persist. In distressed countries, such as Greece and Ireland but also in the Netherlands, access to finance is a very pressing problem for SMEs, while in Germany or Austria only 7% of SMEs reported access to finance as the most pressing problem. 

See more from this Government Report: Brussels, Luxembourg


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