Website: The European Investment Fund

EIF is the European Union’s specialised financial institution for small or medium-sized enterprises (SMEs).

EIF makes venture capital investments to support the emergence of a performing and homogenous European venture capital market

EIF’s SME guarantee instruments to a wide range of intermediary banks and financial institutions facilitate SME access to debt finance.

EIF:
+optimises the impact and benefit of its operations, in close association with the financial sector
+plays a catalytic role to attract private sector finance
contributes to the diffusion of best market practices in its business field

EIF's beginnings
EIF was founded in 1994 as a joint venture between three shareholder groups: the European Investment Bank, the European Commission (EC) and a number of European public and private financial institutions. EIF’s main task then was to provide financial institutions with infrastructure and guarantee instruments for SME finance. (EIB), the

EIF’s involvement in venture capital began in 1997, as part of the EC’s "Growth and Employment" initiative.

In June 2000, EIF was restructured and its shareholding structure was modified with the EIB becoming the majority shareholder, culminating in the formation of the EIB Group. EIB’s role as principal shareholder endorsed EIF’s role as the exclusive vehicle for venture capital of the EIB Group. Since then, EIF has continued to provide portfolio guarantees for institutions involved in SME finance.

EIF’s resources
EIF’s shareholders are the European Investment Bank (EIB), the European Union represented by the European Commission, and a number of European banks and financial institutions from the public and private sector.

EIF carries out its venture capital and guarantee activities using either its own funds or funds entrusted by mandates. The principal sources of mandated funds are the main shareholders, the EIB (EUR 4bn) and the European Union (EUR 1.1bn), whilst up to EUR 1bn is derived from EIF’s partnerships with public and private bodies.

Modus operandi
EIF acts independently and, uniquely for a European body, acts commercially under market conditions, with a statutory obligation to target appropriate returns for its shareholders.

EIF has a AAA-rating from the principal rating agencies and has the status of a Multilateral Development Bank under the European Union solvency ratio directive, which allows financial institutions to allocate capital in respect of EIF guarantees at a rate of 0%.

EIF works in the enlarged European Union and has broken traditional finance boundaries through activity in Turkey, the Western Balkans and South-Eastern Europe.