EU Funding Update for VP/SI Practitioners EFSI Social Impact 23 - - PowerPoint PPT Presentation

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With the financial support of the European Union

EU Webinar Series | #8

EU Funding Update for VP/SI Practitioners EFSI Social Impact

23 November 2016

With the financial support of the European Union

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Simon Ott

Policy Analyst EVPA

Welcome

Elinor de Pret

Head of Policy EVPA

With the financial support of the European Union

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#1 | 25.06.2014 | EuSEF Regulation #2 | 25.09.2014 | Impact Measurement #3 | 05.03.2015 | SIBs #4 | 17.06.2015 | EU Funding for VP/SI #5 | 23.09.2015 | EU Public Procurement #6 | 16.03.2016 | Crowdfunding #7 | 21.06.2016 | Retail Social Investment #8 | 23.11.2016 | EU Funding Update  Wide Reach*: 903 registrations 429 “live” participants + 879 online views

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EU Funding Update for VP/SI Practitioners EFSI Social Impact Welcome to Today’s Webinar!

With the financial support of the European Union

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Welcome to Our e-Speakers!

Shadin Viratham

COM (DG EMPL / E1)

Silvia Manca

EIF

Georgia Efremova

COM (DG ECFIN / L2)

Yvette Go

EIF

With the financial support of the European Union

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1. Overview of EU’s policies & funding instruments in support of social enterprises Shadin Viratham 2. An Introduction to the European Investment Plan, EFSI and its Equity Instruments for Social Impact Georgia Efremova Andon Kalibatsev (Q&A) 3. EFSI Equity Instruments for Social Impact: how do they work in practice? Silvia Manca Yvette Go 4. Panel Discussion & Interactive Q&A Session (moderated by Elinor de Pret)

Programme

With the financial support of the European Union

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Shadin Viratham

Programme Manager, EaSI Financial Instruments and EFSI European Commission (DG EMPL / E1)

• 1. Overview of EU Policies & Funding

EFSI Equity for Social Impact

EU funding for social enterprises

Shadin Viratham Pulsawatdi DG EMPL.E1 Job Creation EVPA Webinar Series, November 23, 2016

Social enterprises share 3 common dimensions

Governance

Limits on distribution of profits

Social

Social as primary

• bjective

Entrepreneurial

Continuous economic activity

Social Business Initiative: a clear commitment to stimulate the creation, development and growth of social enterprises

• Mapping study
• OECD
• Mainstreaming in the EU programmes

Visibility and recognition

• EaSI programme
• European Structural & Investment Funds

(ESF , ERDF)

• European Social Entrepreneurship Funds

(EuSEF) Regulation

Access to finance

• Public procurement

Regulatory environment

Social enterprise finance: why is EU support needed?

• There is a mismatch between demand and

supply

• Available investments do not suit the needs of

social enterprises

Dual objective under the EU programme for Employment and Social Innovation (EaSI)

1 2

Facilitate access to finance for social enterprises Support the development of the social investment market

EU funding: offering the right product mix to boost support for social enterprises under EaSI

Guarantees Financial instruments Equity under EFSI SMEW Capacity-building Intermediaries

Investments up to EUR 500k

Loans Other products Grants Actions to boost the supply and demand sides of the market Social enterprises

With the financial support of the European Union

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• 2. EU Investment Plan & EFSI

Georgia Efremova

Policy Officer, Financial instruments - Social Impact Investment European Commission (DG ECFIN / L2)

EFSI Equity for Social Impact

Investment Plan for Europe

Georgia EFREMOVA DG ECFIN, Financing for Innovation, Competitiveness and Employment EVPA Webinar Series, November 23, 2016

The Investment Plan for Europe

 EFSI: a bold new approach to public spending  Leveraging private investment for increased efficiency  Catalytic role to unlock and attract more funding that is better suited to social enterprises  First pillar of the Investment Plan for Europe  Investment Plan for Europe  Launched in 2015 with the goal of helping European MS to overcome the current investment gaps  Consistency with EU policies for smart, sustainable and inclusive growth, quality job creation  Additionality of investments: risky projects in strategic sectors with high externalities  Looking forward: working with all three pillars of the Investment Plan to tap the potential of IPE for delivering social impact

• EFSI guarantee fund: € 16 billion EU budget

guarantee, € 5 billion of EIB resources

• Strategic investments in infrastructure as

well as risk finance for small businesses

• Infrastructure & Innovation and SME

Windows

• 1. MOBILISING FINANCE

FOR INVESTMENT

• European Investment Project Portal

(EIPP)- greater visibility of investment

• pportunities
• European Investment Advisory Hub

(EIAH)- Europe's gateway to investment support

• 2. MAKING FINANCE

REACH THE REAL ECONOMY

• Facilitating the deployment and usage of equity

type products

• Alleviating regulatory hurdles faced by private

funders and enterprises themselves

• 3. IMPROVED INVESTMENT

ENVIRONMENT

The EFSI Opportunity

 Both IIW and SMEW make specific reference to social infrastructure and social enterprises.  Excellent performance of EFSI SMEW, with a mix of facilities covering:  both debt and equity financing  finance to SMEs and small mid-caps in the EU in early, as well as expansion stages of their life-cycle  specifically the needs of higher-risk, innovative/ research-intensive companies, start-ups and high-growth SMEs, social enterprises, internationalisation of SMEs.  More volumes and faster outreach of existing facilities (Cosme, Innovfin, EaSI)  EFSI Equity product targeting previously unaddressed needs, including social impact

EFSI SMEW Social Instruments

• EaSI Capped Guarantee

(launched 2015)

• Future EaSI products (to be

developed H1 2017)

Enhancing

EaSI instruments

• Social Incubators/Accelerators
• Social Business Angels
• Social Impact Pilot Product

(launched October 2016)

Social Impact Window under EFSI Equity Product

Boosting the volumes and outreach of the EaSI products for micro- and social entrepreneurship: ensuring high leverage effect. Piloting innovative equity instruments to ensure the right product mix for social entrepreneurship and innovation: strong focus

• n the early- stage

funding segment

EFSI Equity Social Impact Window

Social Incubators/ Accelerators Social Business Angels Payment-by- results/ SIB schemes

EFSI Equity Product: Social Impact Window

An incubation facility to support the investment readiness

• f

early (pre- commercial) stage social enterprises in need of small investment tickets A pan-European co-investment facility targeting social enterprises at seed and early stage. An innovative financing mechanism to support the development of social impact market in Europe and scale- up social service provision.

Min Eur 30 m Min Eur 25m Min Eur 25 m

With the financial support of the European Union

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• 3. EFSI Social Impact in Practice

Silvia Manca

Manager, Social Impact Programmes - Institutional Business Dvpt EIF

Yvette Go

Head of Social & Environmental Impact Investments EIF

Social ial impact act under r EFSI I New tools s for impact act inves esting ting

EVPA A – Webina nar Silv lvia ia Manca & Yvette ette Go 23 Novem ember er 2016 16

2

Di Discl claimer aimer

• This document is for information purposes only and is intended to provide

an outline of the main terms for the products described therein, which are indicative, non-exhaustive and subject to change

• This document does not constitute a recommendation, a solicitation, an
• ffer or a binding commitment – either implicit or explicit – on the part of

the EIF

• This document and any information contained therein may not be

circulated and/or reproduced in part or in full without the prior written consent of EIF

EIF’s potent ential ial pro roducts ucts ove verv rview iew targ rgetin eting g micro ro/soc /social ial ent nter erpri prises es (*) EFSI I EaSI EIB Gr Group

Social Impact Accelerator EUR 243m [Capacity Building Investments]

Under development

Payment by Results

On-going

[Funded Product] (loans)

Under development

[Additional Product] Capped Guarantee [Additional EFSI resources] Intermediaries linked to incubators/ accelerators + Business Angels

On-going 3 On-going *indicative list, some products are still under development

Social ial Impact t Ac Accel eler erato tor

Social ial Impact t Ventu ture e Capital tal Fund Social ial SME Social ial SME Social ial SME Social ial SME Social ial SME Invest estme ment t Target gets Final al benef efic iciar iarie ies

Crédit Coop

• pératif

Fund-of

• f-fu

funds nds Invest estors

SITRA Bulgaria lgarian Developm pment nt Bank

Social ial Impact t Ventu ture e Capital tal Fund Social ial Impact t Ventu ture e Capital tal Fund Across ss the EU, Candidate date Countries tries and Potent ential ial Candida idate te Countries tries Public ic-Privat ivate e Partne tnersh ship ip EUR 243m m Inve vestm tment ent Capacity ity

SIA – Stru ructur ture

Social ial Impact

EIB/EI EIF

Deutsch che Bank 4

5

Europe’s leading social impact fund inv nvestor

• r

Since 2014: 9 social impact fund investments EUR 95m committed

New tools fo for i r impact act inv nvesti ting ng EFSI I Equity ity Ins nstru rumen ment

6

New ew to tool

• ls for
• r impa

pact ct inv nvest esting ing

Investments in/alongside intermediaries linked ed to incubators/accelera ators/accelerators tors targeting social enterprises Investments in business angels funds or co- investments alongsi side de business ness angel els s targeting social enterprises Payment ent by Results ts inves estm tment ent schemes es targeting social sector

• rganizations at large

SME Development Stages

DEVELOPMENT

HIGHER RISK LOWER RISK Public ic Stock Marke kets ts Incubato bator/Ac /Accel eler erator ator-linke linked d funds Technolo hnology gy Transf sfer er Microc

• credit

edit VC Early y Stage Portf tfolio

• lio Guar

arante ntees es & C Credit it Enhance nceme ment nt VC Lower Mid-marke ket t & M Mezz zzanin anine e Funds

PRE-SEED PHASE SEED PHASE START-UP PHASE EMERGING GROWTH

Social ial Impact t Funds ds Business ness Angel els Payme ment nt-by by-Resu esults lts invest estme ment nt schem emes es Social ial Impact t focused sed tools ls

Complementing EIF’s financing spectrum

EFSI I Inv nvestment ment Cri riteri eria(*) (*)

Indep epen endent ent Management agement team EIF IF ranks nks (at least) ) pari passu su Max comm mmitm tment ent: : € 50m 50m 7.5% ≤ ticket size ≤ 50% (typicall ally) y) 2X – 2/3 rul ule Eligible ble benefi ficiar ciaries: es: SMEs Es, , Small ll mid-caps, caps, SocEnt cEnt 15 years rs +3

(*) non-exhaustive list 8

Inv nvestmen ment t in/ n/al alongsi

• ngside

de Finan nanci cial al Int ntermedi rmediari aries es link nked to inc ncubators bators/ / accele elerat rators

• rs

9

EIF as (co-)investor Private/Institutional Investors

Financial Intermediary (Typically venture capital funds)

Portfolio of Social Enterprises (and other eligible beneficiaries)

established or operating within the EU ranging from pre commercial stage up to early growth

Incubators/ Accelerators

Min: 7.5% Max: typically up to 50% Max: EUR 50m

Equity/Preferred Equity/ Hybrid Debt-Equity/ Other mezzanine financing Services

Co Co-inves nvestmen tment with Busines ness Ang ngels

10

EIF as (co-)investor Business Angels/ Business Angels Funds Co-investment vehicle/agreement with Business Angels

Portfolio of Social Enterprises (and other eligible beneficiaries)

established or operating within the EU ranging from early stage to growth stage

Min: 7.5% Max: typically up to 50% Max: EUR 50m

Equity/Preferred Equity/ Hybrid Debt-Equity/ Other mezzanine financing

Payment ment-by by-Results ults

11

EIF as (co-)investor Private/ Institutional Investors/ PbR Manager Financial Intermediary

(Typically through special purpose vehicles)

Social Enterprises/Social Sector Organisations

established or operating within the EU

Min: 7.5% Max: typically up to 50% Max: EUR 50m

Equity/Preferred Equity/ Hybrid Debt-Equity/ Other mezzanine financing/ Debt

Impact ct measurement urement

12

1

SOCIAL AL OBJECTI ECTIVE STAKE KEHOLDER DER ANAL ALYSI YSIS IMPACT

2 3 4 5 6 7 8

elaboration of change theory identification of social issue definition of stakeholder-specific metrics analysis of stakeholder expectations stakeholder selection stakeholder mapping definition of stakeholder-specific

• bjectives

measurement/reporting of social impact performance

12

Intermediary’s financial reward is linked to the achievement of social impact across the portfolio 2-3 Impact KPI’s per investee (except for PbRs, where impact- reward link is captured in the tool’s structure)

Wh What do we look fo for? r?

13 13

Team or r BA Invest vestmen ment Strategy tegy Marke rket t opportuni

• rtunity
• r need

Vehi hicl cle structur ructure and size ze

Downs

• wnside

de Prote

• tection

Terms s & Condi ditions

• ns

Impact Thesi sis, Theo eory ry of Change ge Active e pipel eline ne Alignm nmen ent t of interest rest Releva vant nt dealflo flow

14

Applicat ication ion & Pro rocess(* ess(*)

• 2. EIF’s assessment

Invest estme ment t Readines diness Team and Track Record (WHO) Market Opportunity (WHY) Investment Strategy (WHAT) Parameters (HOW) Polic icy Fit (at least t one indic icato tor) Internationalization Multi-country focus Countries with VC activity below average Special focus areas: BA/TT/Social H2020 sectors

EFSI Equity Instru rume ment nt Call for EoI

• 1. Expre

ressi sion

• n of interest

erest – Deadl dline ne: : 5 May 2018 018

http://www.eif.org/what_we_do/efsi/equity/index.htm

• Subj

bjec ect

• Engl

glish ish

• Anne

nex x I duly ly signe ned d

• Mini

nimum mum Inform formation ation

efsi_equity@eif.org

(*) non-exhaustive , please consult our website for more detailed information

Cont ntact act De Detail ils

15

Silvia a Manca Head of Social Impact Programmes Institutional Business Development Email: s.manca@eif.org Web: www.eif.org Yvette e Go Head of Social & Environmental Impact Investments Technology & Innovation Email: y.go@eif.org Web: www.eif.org

http://www.eif.org/what_we_do/equity/sia/index.htm http://www.eif.org/what_we_do/microfinance/easi/index.htm?lang=-en http://www.eif.org/what_we_do/efsi/equity/index.htm

For further information on SIA, EaSI and EFSI Equity for social impact please visit:

With the financial support of the European Union

Silvia Manca

EIF

Elinor de Pret EVPA Andon Kalibatsev

COM (DG ECFIN / L2)

Yvette Go

EIF

Shadin Viratham

COM (DG EMPL / E1)

Georgia Efremova

COM (DG ECFIN / L2)

• 4. Panel Discussion & Q&A

With the financial support of the European Union

Don’t hesitate to contact EVPA’s Policy Team, should you have any follow-up question related to this webinar and / or to EVPA’s activities!

Simon Ott

Policy Analyst sott@evpa.eu.com

• Dr. Lisa Hehenberger

Policy Advisor Lecturer at ESADE

Elinor de Pret

Head of Policy edepret@evpa.eu.com

Thank You!

With the financial support of the European Union

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