EIF and CDTI launch a new type of investment mandate

On 21st February, EIF signed a mandate with the Centre for the Development of Industrial Technology (CDTI: Centro para el Desarrollo Tecnológico Industrial), a public business entity of the Spanish Ministry of Industry, Tourism and Commerce. The mandate, known as 'Neotec', is the culmination of a successful collaboration between EIF and CDTI to boost the Spanish SME technology sector, mainly through venture capital tools.

The mandate comprises a fund-of-funds and a co-investment vehicle. Emphasis is placed on technology funds, but generalist funds that invest in companies developing commercial applications of new technology or deploying technology supports are included. The venture brings together Spanish public and private sectors for investments in Spanish SMEs fostering innovation and research and development. Through the creation of an active network fostered by EIF and CDTI, the programme will also seek to provide Spanish and foreign investors with a showcase of the best opportunities in Spanish technology.

Fund of funds

The first closing of the fund took place on target at EUR 176m on 21st February. It was subscribed by CDTI, EIF and a number of other investors, mainly Spanish blue chip companies. The final closing, which is expected within the next six to twelve months, will aim for the target size of EUR 200m, although the maximum size is capped at EUR 225m. EIF's total participation will amount to EUR 50m. The other investors to date come from a broad range of sectors, including utilities, banks, savings banks, and telecommunications.

The co-investment vehicle

The co-investment fund is for direct co-investments into technological SMEs, in parallel with previously selected private equity and venture capital funds. It will operate much like a simplified side fund and aims to provide additional flexibility and added value in support of technology SMEs, primarily in cases of co-investment with generalist funds or with technology funds based outside Spain.

In the case of generalist funds intending to invest only a relatively small proportion of their assets in technology SMEs, co-investment from the programme will boost the investment and also increase awareness within generalist funds of the opportunities to be found in Spanish technology. The programme seeks to strengthen Spain's visibility amongst foreign venture capital funds by encouraging leading technology investors in other countries to include Spain in their investment map through attractive co-investment opportunities.

Building on similar initiatives in other Member States, notably in France and the United Kingdom, the CDTI-EIF partnership will leverage EIF resources to ensure a coordinated approach between EIF, national public bodies and the private sector. Furthermore, it will give Spanish public and private investors access to EIF's know-how in fund-of-funds management.

EIF's Chief Executive, Francis Carpenter, said: This is a new generation of financial instruments, bringing together leading public and private Spanish investors. EIF will be present on the ground, with a dedicated team working from Madrid.