Financial Engineering Instruments - Compete

Report
FINOVA – Support Fund to
Finance Innovation
FIN-EN -Sharing Methodologies on Financial Engineering for Enterprises
Lisbon Meeting, 26 September 2013
1
CONTENTS
PME Investimentos
FINOVA – Holding Fund
Financial Engineering Instruments
Results
2
PME Investimentos - History
1989 – 2006
2007 - 2013
Venture Capital Firm
Management of Public Funds
Transformation into an
Investment Company
under the name PME
Investimentos – Sociedade
de Investimento, S.A.
1989
jan 2007
Relinquishing of retail
Strategic Guidelines
Launch of the first
operations by
for the 2007-2009
transferring the portfolio PME Investe (I and II)
mandate
Credit Lines under
to Inovcapital
the scope of FINOVA
New role for the
Company
2008
2003
2007
1998
Company founded
under the name
SULPEDIP (SCR)
Creation of the Venture Capital
Syndication Fund and the
Guarantee Fund for
Securitisation – PMEI appointed
as manager
Participation of FINOVA
in the funding of the VCF
and Business Angels
Credit Lines
2010
2009
2008
Creation of the SAFPRI
and the FINOVA Fund PMEI appointed as
manager
Launch of the
PME Growth
Credit Line
2010
Launch of the PME
Investe
III and IV Credit
Lines
2013
2012
Launch of the
PME Investe V,
VI, VI
Amendment
and QREN
Investe Credit
Lines
Launch of the PME
Growth 2013 Credit
Line and of the
Revitalisation Funds
3
Management of Public Funds
Funding: previous EU Framework
(ERDF)
Manager
Venture Capital
Syndication
Fund
Characteristics and investment
Fund of funds, to refinance and share risk with venture
capital firms
Capital = 45.5 M€
Investments:
• Participation in 5 funds = 23.38 M€
• Participation in 27 venture capital operations (syndicated)
= 17.67 M€
• Refinancing of venture capital operations = 2.88 M€
PME
Investimentos
Fund with the aim of providing guarantees to securitisation
operations
Capital = 25 M€
Manager
Guarantee Fund
for Securitisation
Participation:
•As guarantor in a Securitisation Operation granted to
Portuguese SMEs
•European Investment Fund as an Adviser for the
securitisation operation
•Amount received from the Securitisation Operation
(500 M€) went towards granting new loans to SMEs
4
PME Investimentos – Manager of FINOVA
PME Investimentos:
 A Credit Institution under the supervision of the Bank of Portugal, majority
owned by Public Entities
 Manager of the Funds of Funds, originating from State initiatives
 Refinances the market, but does not intervene directly in the credit and capital
markets
 Proven experience in the management of public instruments for the refinancing
and risk sharing of financing innovation
PME Investimentos’ characteristics and its relevant experience made its appointment
as manager for FINOVA possible
5
PME Investimentos
FINOVA – Holding Fund
Financial Engineering Instruments
Results
6
FINOVA - Creation
Created by national legislation
(DL 175/2008 dated 26 August),
under the scope of SAFPRI (FEI
national regulation)
Appointment of
PME Investimentos
as manager
Strategy / Objectives
 Centralisation and coordination of
Governence
General Board (GB):
- Made up by the participating public entities and
efforts and resources related to
the Manager
Competencies:
public interventions intended to
- To define the fund’s investment policy, deciding on the
congruity of all investments with said policy
-To deliberate on the regulation proposals related to the
configuration of the instruments and to the activity of
FINOVA
- To deliberate on the increase or reduction of FINOVA
capital
- To approve financial plans and annual budgets, as well
as the accounts and implementation reports
support the funding of companies,
namely SMEs
 Encouraging competitiveness by:
 Stimulating the participation of
venture capital to support SMEs,
giving preference to the earlystages of their life cycle and
innovative projects;
FINOVA
 Reinforcing the system of mutual
guarantee;
 Promoting the contractualisation
of subsidised credit lines.
Advisory Board:
- Made up by the members of the GB and by
entities with economic relevance
Competencies:
- To analyse and issue opinions on FINOVA’s investment
strategy
- To analyse and issue opinions on the broader
guidelines related to the proposed objectives,
suggesting new areas of action
- To suggest measures which could improve the
adequacy of FINOVA to its objectives and policies
followed
7
FINOVA - Conceptualisation
Funders
Managing
Authorities
Funding
IAPMEI
Turismo de Portugal
IEFP
AICEP
Public Entities
Participants
Participation
capital
in
share
FINOVA
Holding Fund
Participation in share
capital
Financial Engineering
Instruments
State Funds
Revitalisation
Funds
Participation in share
capital
Venture Capital
Funds
Granting of funds
Funding Line for BAs
Subsidised
interest
Guarantee fee
Subsidy
Credit Lines
Capitalisation
Funding
Final Recipients
SME
8
FINOVA - Capital
Subscribed Capital
1.156 M€
Credit Lines
965 M€
Credit
Insurance
Venture
Capital
30 M€
161 M€
1
Since 2008, the year FINOVA was created, the public entities that subscribed its capital committed to
channel 1.156 M€ to the Fund, IAPMEI stands out for holding 89% of the share capital.
As of 30 June 2013, paid-in capital amounted to 953 M€ .
1
Amounts include all financial instruments created within the scope of FINOVA, including those that do not have ERDF funding
9
PME Investimentos
FINOVA – Holding Fund
Financial Engineering Instruments
Results
10
Financial Engineering Instruments
Subsidised and Guaranteed Credit Lines:
Objectives
Launched in 2008, within the scope of the anti-crisis
measures, they correspond to the concern of the funding
public entities in facilitating and improving the conditions
for access of companies to bank loans
State Aid
State aid in the form of granting subsidised interest rates
and guarantee fees, as well as the issuing of the actual
mutual guarantee, by increasing the capital of the Mutual
Counter Guarantee Fund (MCGF)
Amounts (Credit Lines I and II)
- Credit Line I: 750 M€
- Credit Line II: 1,000 M€ (specific sub-lines aimed at the
General, Commercial and Catering Sectors)
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Financial Engineering Instruments
Subsidised and Guaranteed Credit Lines:
Advantages for SMEs
- Competitive Interest Rates
- Obtaining a mutual guarantee
- Subsidised Interest
- Payment in full of the guarantee fees
Conditions for Access
- Micro, Small or Medium enterprises
- Location – company head office in Mainland Portugal
- Company activity in line with the SAFPRI
- Without unjustified incidents or defaults with banks
- All contributions to the Tax Authority and Social Security
have been settled
Eligible operations
Operations aimed at investing in new tangible fixed assets
or intangible assets and the increase of working capital
related to the increase of activity
12
Financial Engineering Instruments
Venture Capital Funds:
Objectives
To fill market gaps, allowing enterprises, especially smaller
ones, to access venture capital so that they may develop
strategies for innovation, growth and expansion
State Aid
State aid (FINOVA) in the form of participation in share
capital (subscription of units of participation) of Venture
Capital Funds, taking up positions of between 50% and 70%
Tipology
The tenders opened in 2009 were aimed at the creation or
reinforcement of the following types of Venture Capital
Funds:
- Innovation / Internacionalisation (10 VCF)
- Corporate Ventures (2 VCF)
- Early Stages (4 VCF)
- Pre-Seed (3 VCF)
13
Financial Engineering Instruments
Venture Capital Funds:
Characteristics / Typology
Total capital amount of Funds / Typology
- Innovation / Internationalisation
To support projects for investment in innovation or
promoted by SMEs which want to internationalise
- Corporate Ventures
To support projects for the creation of new business units,
based on already existing technology-based companies
- Early Stages
To support investment projects in the Early Stage phase
- Pre-Seed
To support investment projects in the Pre-Seed phase in
which, due to their characteristics and the high risk
involved, is difficult to get funding
- Innovation / Internationalisation: 132 M€
- Corporate Ventures: 9 M€
- Early Stages: 32 M€
- Pre-Seed : 13 M€
14
Financial Engineering Instruments
Venture Capital Funds:
Advantages for SMEs
- Greater access to funding for the development of
investment projects
- Access to privileged partners, with management, strategic
and financial know-how, and more
Conditions for Access
- Micro, Small or Medium enterprises
- Location – company head office in the Northern, Central
and Alentejo Regions
- Company activity in line with the SAFPRI (Industry,
Energy, Construction, Commerce, Tourism, Transportation /
Logistics or Services)
Eligible operations
- Participation, per SME, limited to 1.5M€/12 months, 70%
of which must be made in equity or quasi-equity
- Investment decisions based on sustainable Business Plans
and with the prospect of profitability
- May not be operations for consolidation or financial
restructuring
15
Financial Engineering Instruments
Venture Capital Revitalisation Funds:
Objectives
To fill gaps in the market, allowing access for companies
who wish to develop strategies for expansion, contributing
to the acceleration of economic growth and encouraging
the renewal of the national business fabric
State Aid
State aid (FINOVA) in the form of participation of share
capital (subscription of units of participation) of the
Venture Capital Revitalisation Funds, taking up positions of
50%
Tipology
The tenders opened in 2012 were aimed at the creation of
Regional Venture Capital Revitalisation Funds (created in
August 2013 and yet to perform operations):
- VCF for Revitalization of the Northern Region
- VCF for Revitalisation of the Central Region
- VCF for Revitalisation of the Southern Region
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Financial Engineering Instruments
Venture Capital Revitalisation Funds:
Characteristics
Total amount available for investment
Advantages for SMEs
To support investment projects for expansion,
innovation and/or modernisation promoted by SMEs
and which are in accordance with the requirements
foreseen in the regulatory framework of the ERDF.
Projects that are starting off or which are in the process
of being set up, promoted by SMEs, may also be eligible
for funding
- VCF for Revitalization of the Northern Region : 80 M€
- VCF for Revitalisation of the Central Region: 80 M€
- VCF for Revitalisation of the Southern Region: 60 M€
- Greater access to funding for the development of
investment projects
- Access to privileged partners, with management, strategic
and financial know-how, and more
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Financial Engineering Instruments
Venture Capital Revitalisation Funds:
Conditions for Access
- Micro, Small or Medium enterprises
- Location- company head office in the Northern, Central
and Alentejo Regions
- Company activity in line with the SAFPRI (Industry,
Energy, Construction, Commerce, Tourism, Transportation
/Logistics or Services)
- May not be “firms in difficulty”, in accordance with the
Community concept
Eligible operations
- Participations, per SME, limited to 1.5M€/12 months,
70% of which must be made in equity or quasi-equity
- Investment decisions based on sustainable Business Plans
and with the prospect of profitability
- May not be operations for consolidation or financial
restructuring
18
Financial Engineering Instruments
Financing Line for Business Angels (BAs):
Objectives
State Aid
Vehicle Entities (51 VE)
Fill gaps in the market:
- Develop the financial market through venture capital
investors (Business Angels)
- Facilitate the access of enterprises, especially smaller
ones and those which are innovation-based, to venture
capital so that they may develop their strategies for
innovation, growth and expansion.
State aid (FINOVA) in the form of granting funding to
Vehicle Entities (VE) owned by BAs, with the underlying
venture capital investment made by the BAs (funding up to
65% of the amount of each of the venture capital
operations)
- Majority owned and managed by BAs
- Minimum amount of share capital paid in by BAs to the
VEs may not be less than 35% of the amount of each of the
venture capital operations
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Financial Engineering Instruments
Financing Line for Business Angels (BAs):
Funding characteristics
Total amount available for investment
- Medium-term funding, granted to VEs, with a maximum
amount of 500 k€, carried out in accordance with venture
capital operations
- Return on funding set according to the performance of
the underlying venture capital operation
- Repayment of funding with asymmetric distribution
between FINOVA and BAs:
- Distribution of repayment 20% (FINOVA)/ 80% (BA),
until BAs are repaid the total amount they invested
- Subsequent symmetric distribution (50%/50%), until
FINOVA is reimbursed the amount funded
- Distribution of remaining proceeds 20% (FINOVA)/ 80%
(BA)
43 M€
20
Financial Engineering Instruments
Financing Line for Business Angels (BAs):
Advantages for SMEs
- Greater access to
Conditions of Access
- Micro, Small or Medium enterprises
- Location – company head office in the Northern, Central
and Alentejo Regions
- SMEs activity in line with the SAFPRI (Industry, Energy,
Construction, Commerce, Tourism, Transportation /
Logistics or Services)
Eligible Operations
funding for the development of
investment projects
- Access to privileged partners, with management, strategic
and financial know-how, and more
- Participations, per SME, limited to 1.5M€/12 months,
70% of which must be made in equity or quasi-equity
- Investment decisions based on sustainable Business Plans
and with the prospect of profitability
- May not be operations for consolidation or financial
restructuring
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PME Investimentos
FINOVA – Holding Fund
Financial Engineering Instruments
Results
22
Results
Subsidised and Guaranteed Credit Lines:
53% Small enterprises
Credit Lines
PME Investe I & II
42% Northern Region
44% Industrial Sector
1.535 M€
Total Credit Loans
4.508
Loans
Average operation amount 340 k€
Average duration 4.4 years
62% Investment in Fixed Assets
Average number of employees 36
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Results
Venture Capital Funds1:
37% Micro enterprises
33% Medium enterprises
19 VCF
22 M€
Invested in SMEs
29 operations
83% Central Region
72% Services Sector
Average operation amount 744 k€
Number of employees 21
1
Information reported in June 2013
24
Results
Financing Line for BAs1:
>50% Micro enterprises
51 Vehicle
Entities
owned by BAs
109 Financing
Operations
granted to VEs
14 M€ Invested
78 SMEs supported
1
56% Northern Region
70% Services Sector
Average operation amount 180 k€
Average number of employees 3
Information reported in June 2013
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PME Investimentos Contact Information
Additional Information
Carlos de Castro
Vice-President and CEO
[email protected]
Telephone numbers:
(+351) 21 799 42 74
(+351) 21 799 42 75
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