Private equity enables unlisted private companies to obtain start-up and development financing.
FEMIP provides equity or quasi-equity funding (participating or mezzanine loans) from its budgetary resources, mainly to small and medium-sized enterprises, both via funds and with direct investments. It also makes participating loans to selected micro-credit associations.
The capital injection would be a temporary minority participation. Remuneration is essentially the capital gain generated when the holding is sold and the expected return must be commensurate with the risk assumed.
Our private equity operations have several particular features:
- Governance: our hands-on approach leads to the application of best market practice for financial discipline and governance.
- Leverage: we are always a minority investor, committing at a very early stage to the projects that we finance. This often serves to allow the company to attract other sources of funding.
- Sustainability: The private equity operations supported by us are expected to be profitable, so creating value and jobs.
In order to reduce government risk exposure and mobilise additional resources, FEMIP also offers guarantees to MSMEs, large companies, domestic banks, public sector promoters as well as sub-sovereigns.
Finally, the EIB-FEMIP provide the MPCs with technical advisory services in order to improve the quality of lending operations and enhance their development impact.