Call for expression of interest

PROGRAMME FOR COMPETITIVENESS OF ENTERPRISES AND SMALL AND MEDIUM SIZED
ENTERPRISES
Equity Facility for Growth
Window of the Single EU Equity Financial Instrument supporting
Union enterprises’ growth and research and innovation (R&I)
OPEN CALL FOR EXPRESSION OF INTEREST
TO SELECT FINANCIAL INTERMEDIARIES UNDER the Programme for Competitiveness of Enterprise
and Small and Medium Sized Enterprises (“COSME”)
(Published on 4 August 2014)
The objective of this Open Call for Expression of Interest, launched by the European Investment Fund
(the “EIF”), is to select eligible financial intermediaries to become Financial Intermediaries under the
COSME – Equity Facility for Growth (“EFG” or “the Facility”). The EFG is a window of the Single EU
Equity Financial Instrument supporting Union enterprises’ growth and research and innovation (R&I)
from the early-stage, including seed, up to the growth stage1. All applications for EU Investments
under the Facility to be submitted to the EIF should be conform to this Open Call for Expression of
Interest.
To learn more about the COSME Programme visit:
http://ec.europa.eu/enterprise/initiatives/cosme/index_en.htm
1. Equity Facility for Growth
On 11 December 2013, Regulation (EU) No 1287/2013 of the European Parliament and the
Council establishing a Programme for the Competitiveness of Enterprises and Small and Mediumsized Enterprises (“COSME”) for the period 2014-2020 was adopted. Under this Programme, the
financial instrument named Equity Facility for Growth (“EFG” or “the Facility” hereinafter) was
established to target SMEs2 in their expansion and growth stage.
Pursuant to the Delegation Agreement between the European Union (the “EU”) and EIF in respect of
the financial instruments under COSME dated 22 July 2014, the EIF has been entrusted by the EU to
implement the Facility.
Under this Facility EIF shall provide equity financing to selected EFG Financial Intermediaries, using a
combination of the EU's COSME contribution and other EIF’s resources.
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Open Call for Expression of Interest dedicated to the early stage will be published at a later stage.
Micro, small or medium-sized enterprises as defined in the Commission Recommendation 2003/361/EC (OJ L124, 20.05.2003, p. 36) as
amended from time to time.
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The operational guidelines to implement the Facility are further described in Annex II to this Open
Call for Expression of Interest.
As at the date of publication of this Call of Expression of Interest, the countries covered by the Facility
comprise EU Member States, Iceland and Montenegro (“Participating Countries”) and may include
other associated countries having entered into relevant agreements with the European Union.
Additional countries may potentially be added to the Participating Countries of the COSME
Programme at a later stage. For up-to-date information please consult the COSME Portal.
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In this Call for Expression of Interest, capitalised terms and expressions shall have the meaning
attributed to them in this document and as defined in the Definition section of the Annex II
(Operational Guidelines).
2. Financial Intermediaries
This Open Call for Expression of Interest is addressed and restricted to Financial Intermediaries as
defined and further specified in Annex II (Operational Guidelines).
Financial Intermediaries shall represent that they are not in any of the situations of exclusion, as
further described in the Annex I to the Open Call of Expression of Interest.
Financial Intermediaries shall also represent that they are established and operating in one of the
Participating Countries, that they do not perform activities which are illegal as further specified in
Annex I.
Financial Intermediaries shall comply with relevant standards and applicable legislation on the
prevention of money laundering, the fight against terrorism and tax fraud to which they may be
subject and shall not be established and shall not maintain business relations with entities
incorporated in any Non-Cooperative Jurisdiction3.
The EIF Anti-Fraud Policy shall apply to the Fund Agreement under the Facility.
3. Application procedure
This call is open until 30 September 2020 or such earlier date as announced officially in the Facility
section on EIF’s website (the “Deadline”).
Financial Intermediaries interested in applying to this Call for Expression of Interest (the “Applicant”)
shall submit an application to EIF before the Deadline to be considered as a possible Financial
Intermediary under the Facility.
The points below list the headings for the minimum information needed for EIF to start the selection
process:
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management team
investment strategy
track record
target market
deal flow
geographical scope
target sectors
fund size
legal structure/governance structure
Any jurisdiction classified as “non-compliant” by the Organisation for Economic Cooperation and Development (OECD) and its Global
Forum on Transparency and Exchange of Information for Tax Purposes, from time to time.
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proposed terms
expected returns
other investors
timing of fund raising.
Each Applicant shall provide supporting documentation on the points listed above as well as the Annex
I duly signed.
Following selection of the applications, the Fund Agreement shall be signed with the Financial
Intermediary. The ultimate decision on the form of the agreement shall be made at the discretion of
the EIF, in line with the mandate given by the EU for the implementation of this Facility.
Applicants may send questions regarding the Open Call for Expression of Interest. EIF shall analyse
such incoming questions and may publish from time to time the resulting answers in the form of FAQ
(Frequently Asked Questions) document posted in the Facility section of the EIF’s website.
EIF reserves the right to update the FAQ document from time to time as and when it regards
appropriate.
4. Language
The Expression of Interest shall be prepared in English.
The terms of the Fund Agreement shall be in English.
5. Submission of Expression of Interest
The Expression of Interest shall be submitted before the Deadline in writing either by email or in paper
format via registered mail or professional courier.
The Deadline is set on the 30 September 2020, provided that EIF, in agreement with the EU, may, at
its sole discretion, determine that the Deadline will end on an earlier date depending, inter alia, on
the availability of the budgetary resources for the Facility. Any change in the Deadline will be
announced officially in the Facility section of EIF’s website.
The Deadline applies (i) in case of e-mails to the reception by EIF and (ii) in case of registered mail or
professional courier service to the date of dispatch proven by the post office stamp or a dispatch
receipt.
The Expressions of Interest shall indicate the name of the Applicant and be sent either to the following
address:
European Investment Fund
Equity Facility for Growth – COSME – Expression of Interest
Equity Investment Team
37B avenue J.F. Kennedy
L-2968 Luxembourg
or by electronic version to: cosme.efg@eif.org, stating in the subject of the email, as appropriate:
“EFG – COSME– Expression of Interest: [name of the Applicant]”.
An acknowledgement of receipt will be sent to the relevant Applicants by EIF via e-mail, which shall
state the confirmation that the Expression of Interest was received before the Deadline.
The acknowledgement of receipt shall not be construed as a declaration of completeness of the
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Expression of Interest and the documents submitted therewith, nor any kind of assessment or
acceptance of the same.
The Applicants may withdraw, in the same manner as specified above, their Expression of Interest at
any stage of the selection process.
6. Selection procedure
Financial Intermediaries will be selected in due consideration of the general principles of
transparency, equal treatment and non-discrimination, in compliance with EIF’s policies, rules,
procedures and statute and in conformity with best business and market practices.
Following the receipt of the Expression of Interest, EIF shall assess the applications on a continuous
basis, using professional analysis and judgment, taking into account the criteria set out in the Annex II
(Operational Guidelines) as well as the following factors:
1.
Assessment criteria for performance
 Management Team
o Relevant experience
o Composition of the team, track record and balance of skills
o Ability to provide relevant added value
o Ability to provide adequate commitment for the life of the fund
o Screening of management team members in accordance with standard market
practice and with specific attention to issue related to corrupt, fraudulent, coercive
or collusive practices or criminal convictions concerning their professional conduct
 Market
o Identification of the target market
o Size of the market and potential development of it
o Growth potential of SMEs in the target market
 Deal Flow
o Track record of access to deals
o Quality of deals
o Credibility of plans to develop deal flows
 Investment Strategy
o Fund, stage, sector and geographical focus
o Number of targeted investments
o Appropriateness of the investment strategy to the market
o Coherence with the purpose of EFG
o Identification of suitable and achievable exit routes for targeted investments
 Size of the fund
o Balance between fund size and expected deal flow
o Adequacy of provision for follow on investments
 Proposed terms
o In line with market norms, with explanations for deviations
o Any performance related remuneration such as carried interest to be designed to
reward overall fund performance
 Expected returns
o Evidence that the fund is to be run on a commercial basis and that it can be
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expected to be financially viable
 Investor base
o Pari-passu ranking (i.e. Like Risk, Like Reward) of Market-Oriented Investors
o Evidence of support from other investors
o Co-investment strategy and rationale
o Screening and monitoring of co-investors to the extent the information is made
available to the EIF and in accordance with standard market practice.
2.
Assessment criteria for policy fit
 Fit of the Financial Intermediary’s investment strategy with the policy objectives of the EFG.
The EIF shall apply the following criteria:
o
expected support to Eligible Final Recipients in the Expansion and Growth phase
through further development and value creation;
o
additionality of the EU Investment meaning that the investment under the EFG shall not
lead to crowding out of other funding sources;
o
contribution to the development of a structurally balanced venture capital and private
equity market in the Participating Countries;
 Multi-country focus / internationalisation approach of the Applicant. The EIF shall apply the
following criteria:
o
investment strategy of the Applicant targeting Eligible Final Recipients in more than one
Participating Country;
o
support to Eligible Final Recipients to internationalise, promoting the development of
the supported Final Recipients cross-border, i.e. outside their country of establishment,
irrespective of whether to another Participating Country or non-participating country.
The investment proposals will be graded for policy fit and receive a score of high, medium or
low.
The selection process of the EIF is articulated in the following steps:
1. Screening
2. Due Diligence
3. Assessment
as a result of which EIF will decide, on the basis of the assessment of the performance and of the
policy fit, whether or not to propose to its Board of Directors for approval entering into a Fund
Agreement under the EFG. In this context, also the availability of budgetary resources under the
Facility will be taken into account.
The decision to perform a due diligence visit shall be at the discretion of the EIF. The contractual
negotiation process of the EU investment with the selected Financial Intermediary may not be
considered concluded prior to the approval of the proposal by EIF Board of Directors.
In any phase of the selection process until and prior to entering into a legally binding agreement with
an Applicant, EIF reserves itself full discretion to consider or not Applicants, and no Applicant has any
claim or other right or may expect to be ultimately selected as Financial Intermediary. Any negotiation
of terms and conditions of Fund Agreements by no means entails any obligation for EIF to enter into
such agreement with the relevant Financial Intermediaries.
Those Applicants, whose Expression of Interest is rejected at any stage of the selection process, shall
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have the right to submit a written complaint by e-mail and registered mail or professional courier
service, to the same address used for the submission of the Expressions of Interest above, within thirty
(30) days of receipt of the rejection notice. Any complaints will be dealt within the framework of and
in accordance with the EIB Group complaints policy4.
7. Publishing of information on the Financial Intermediaries
EIF shall publish on its website each year a list of EFG Financial Intermediaries with whom the EIF
concluded a Fund Agreement and a list of Eligible Final Recipients as further specified in the Annex II
(Operational Guidelines).
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For further information visit http://www.eib.org/infocentre/publications/all/complaints-mechanism-policy.htm
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