Among other areas, the exit of the UK from the EU will impact the venture capital and private equity industry as well.
An exaggerated pessimism? Maybe…but, please, remember the name of the leading financial institution in the European risk capital market.
We are speaking about the European Investment Fund. Owned by the European Investment Bank (EIB), the European Union (represented by the European Commission), and a wide range of public and private banks and financial institutions, the fund plays, since 1994, a crucial role in the creation and development of high-growth and innovative SMEs by acting as a fund of funds investing in venture capital and private equity firms across the continent.
Be more precise? Figures (at 31/12/2015) from the same institution highlights that, since 1996, which was the first year of activity in the country, EIF has 144 supported UK private equity funds and over 27,700 SMEs, covering the full range of the equity spectrum, from technology transfer to mezzanine and lower/mid market private equity funding. In recent years, the EIB subsidiary has also invested into a number of venture capital funds to support the commercialization of research.
In 2015, EIF’s equity participations in the UK amounted to €655.8m, expected to mobilize €2.87 billion in capital. The fund invested into two co-investments and in 16 funds, out of which 11 are multi-country funds also investing outside the UK.
Among the range of resources managed by EIF on behalf of third parties is the UK Future Technologies Fund (UK FTF), a technology focused fund-of-funds launched by EIF together with the UK Government in 2010. UK FTF invests into venture capital funds targeting ICT, life sciences and advanced manufacturing
sectors, and is fully invested.
Although, especially in the latest months, we noticed an increased capacity of London to attract funds from outside EU, the experience and figures clearly say that the UK venture capital industry was created and has been growing with the support of European Union, like other member countries.
Following the result of the UK referendum on EU membership, EIF issued an immediate statement (read it here) pointing out that it will engage with the EIB and other European institutions to define its activity in the country as part of the discussions to determine the relationship of the UK with Europe and European bodies.
FinSMEs
26/06/2016