Page 109 - Annual Report 2010

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Financial Statements

6. Disclosures relating to off-balance sheet items

6.1 Assets held for third parties

Assets held for third parties represent investments managed by the Fund and trust accounts opened and maintained in the name of the Fund but for the benefit of third parties. EIF acts as an integrated operational platform for SME finance, deploying resources mandated for management by its relat-ed parties (EIB and EC see note 8.1 and 8.2, respectively) and other third parties (public and private entities) depend-ing on the nature of the investment as detailed below.

EIB resources

The Fund manages EIB resources through the following mandates:

„„ European Technology Facilities (ETF) 1 and 2 imple-mented since 1998 which were fully invested by the end of 2008 and 2010, respectively.

„„ The Risk Capital Mandate (RCM) signed with the EIB in 2000 to support, on a revolving basis, technology and industrial innovation through early stage, expan-sion and lower mid-market capital. The portfolio in-cludes EIB’s then existing private equity portfolio that was transferred to EIF in the context of the mandate.

„„ Under the RCM Micro window signed with EIB in February 2009, the Fund provides financial support through equity instruments and funded or unfunded risk-sharing arrangements to micro-credit providers in EU and Accession Countries. The funding was made available by the EIB through the Risk Capital Mandate.

„„ The Mezzanine Facility for Growth (MFG) mandate signed in early 2009 for the Fund to invest in hybrid debt/equity funds over an initial period of three years. The MFG aims at filling the financing gap for European SME and lower mid cap companies by providing hybrid debt/equity products for the ben-efit of mature European small companies with strong market positions and growth potential as well as high technology companies in their expansion stage.

„„ EIB co-funding to the EPMF FCP is described in the European Commission resources section.

European Commission resources

„„ Under the European Union’s Growth and Employ-ment Initiative (G&E) and under the Multi-Annual Programme (MAP) for enterprises and entrepreneur-ship, the Fund manages resources on behalf and at the risk of the Commission. This resource is split equally between private equity and guarantee prod-ucts. The equity segment known as ESU 1998 (G&E) and ESU 2001 (MAP) covers the ETF start-up invest-ments. The guarantees segment known as SMEG 1998 (G&E) and SMEG 2001 (MAP), provides guarantees against the beneficiary’s undertaking.

„„ Under the Technology Transfer Pilot Project (TTP), financed by the European Commission and signed in November 2008, the Fund has supported a tech-nology transfer structure through pre-seed funding and seed funding, as well as funding in the context of licensing and Intellectual Property transaction.

„„ Under the Competitiveness and Innovation Frame-work Programme (CIP), the Fund manages resources on behalf and at the risk of the Commission. The equity segment of CIP known as GIF (High Growth and Innovative SME Facility) covers early stage (seed and start-up) investments and expansion stage (mid-market) investments. Under the guarantees seg-ment of CIP, the SME Guarantee Facility (SMEG 2007), capped portfolio guarantees are provided against the beneficiary’s undertaking to enable in-creased financing to SMEs and to increase the risk taking in the SME financing.

„„ Under the Joint Action to Support Microfinance In-stitutions in Europe (JASMINE) initiative the Fund manages the technical assistance initiative with Eu-ropean Commission resources.

„„ Under the Joint European Resources for Micro to Medium Enterprises (JEREMIE) annual Contribution Agreements entered into with the European Com-mission, the Fund has been mandated to undertake technical assistance and networking activities to support the preparation and structuring of JEREMIE holding fund mandates in cooperation with EU Member States and regions.

„„ Within the involvement of the European Union in the Global Energy Efficiency and Renewable Energy