JESSICA

Holding Fund implementation- lessons Holding Fund implementation- lessons learnt from calls and selection of UDFslearnt from calls and selection of UDFs

Frank LeeHead of Holding Funds and Advisory, Northern Europe

JESSICA and Investment FundsEuropean Investment Bank

To get to up and running UDFs….To get to up and running UDFs….

1. HF establishment• Investment Board/Committee establishment• High level investment strategy – PMC approval• transfer of funds from Managing Authority to HF, treasury policy.• Monitoring and reporting templates

2. Preparatory phase• Detailed/focused feasibility work• Soft market testing• Development or not of standardised financial product• Development of UDF award criteria

3. Call for Expression of Interest launch4. Evaluation of Business Plans UDF selection5. Negotiation and signature of Operational Agreements with UDFs6. Phased investment into UDFs, monitoring

2

UDF Call for Expression of InterestUDF Call for Expression of Interest

• EU Structural Funds requirements

• Usually a 2 stage approach• Stage 1: Call for expressions of interest

• exclusion and selection criteria• Track record/prior experience

• Stage 2: Offers in the form of business plans (award criteria)

• Timetable (usually 2 to 3 months)

3

EIB Holding Funds – implementation progressEIB Holding Funds – implementation progress

4

Signature date

Amount signed in EUR

equivalentCall No of EoIs Manager

Amount signed in EUR

equivalentWielkopolska 29.04.2009 Call 1 9 BGK 19

Call 1 Lot 1 7 UDF selectedCall 1 Lot 2 UDF selectedCall 1 Lot 1 7 Siauliu Bankas AB 6Call 1 Lot 2 Swedbank AB 6Call 1 Lot 3 UDF selectedCall 1 Lot 4 UDF selected

Call 2 1 Siauliu Bankas AB 20Call 1 Lot 1 6 UDF selectedCall 1 Lot 2 UDF selected

Call 1 6 UDF selectedCall 2 Call launched

Call 1 Lot 1 2 UDF selectedCall 1 Lot 2 1 UDF selected

Portugal 20.07.2009 130 Call 1 Lots Call launchedItaly Sicily 19.11.2009 148 Call 1 Call launched

80

Funding Agreement UDF

11.06.2009 227

Country Region

Poland

Lithuania

London 28.10.2009 116

86

38

NorthWest region of England

12.11.2009 117

Westpomerania 30.07.2009

UK

Spain Andalucía 8.05.2009

• Clearly defined UDF investment strategy:– Sector focused versus wide-ranging Urban Project eligibility?– UDF size?– Form of Urban Project investment - debt v equity?

• Engaging the market:– Appetite to undertake role of UDF?– Potential to leverage investment?– ‘Oven ready’ Urban Projects into which monies can be

deployed?

5

Critical success factors – pre procurementCritical success factors – pre procurement

• Investment strategy – credible strategy, robust Urban Project pipeline and evidence of ‘quick wins’

• Governance – independent, competent and robust decision making, risk management and compliance processes

• Leverage and/or risk sharing - committed match funding/co-financing proposals

• Fees – appropriately incentivised management fee structure

6

Critical success factors – award criteriaCritical success factors – award criteria

7

Contacts

JESSICA and Investment Funds Division

European Investment Bank100 Blvd. Konrad Adenauer, L-2950 Luxembourg

www.eib.org/jessica