Thierry Breton, Minister for the Economy, Finance and Industry, Francis Mayer, Chief Executive of Caisse des Dépôts, and Philippe de Fontaine Vive, Vice-President of the European Investment Bank, today inaugurated the Fonds de Fonds Technologique (Technology Fund of Funds) at the headquarters of Caisse des Dépôts in Paris.
With capital of EUR 150m contributed in equal parts by the French State, Caisse des Dépôts and the European Investment Fund (EIF) - the EIB Group's specialist venture capital arm - the Technology Fund of Funds (TFF) will take participations in venture capital funds that will in turn invest in technology firms.
This fund of funds will be managed by the investment capital subsidiary of Caisse des Dépôts, CDC Entreprises. Compared to the Fonds Public pour le Capital Risque (Public Venture Capital Fund) and the Fonds de Promotion du Capital Risque (Venture Capital Promotion Fund - FPCR), launched in 1998 and 2000, which to date have served to finance 31 funds and through them 481 technology firms, the TFF will apply new, more selective investment criteria. It will focus on major players that have the capacity to support enterprise development over the longer term.
The purpose of this joint initiative is to provide additional capital to finance the setting-up and development of innovative SMEs but also to structure the venture capital market by both bolstering existing funds and facilitating the creation of new funds.
The European Investment Fund (EIF) has so far concluded 38 operations in France in support of 56 funds, for a total investment of over EUR 600 million. This corresponds to some 20% of EIF's total venture capital portfolio.
Of this total, EUR 211 million relates to operations concluded with funds of funds promoted by the French Government in close cooperation with CDC PME, including the EIB Fund for venture capital (co-investment facility set up in parallel with the Fonds Public pour le Capital-Risque) going back to 1998 and the Fonds de Promotion pour le Capital-Risque, FPCR 2000, created in 2001. These two funds have generated a total of 14 EIF co-investments. More recently, EIF also invested in the Fonds pour le Capital Investissement Régional (FCIR), which has made 4 investments, as well as the Fonds de Fonds Technologique, launched in 2005. EIF is likewise supporting the Fonds de Co-Investissement pour les Jeunes entreprises (FCJE), which has to date invested in 44 young technology firms. It should also be mentioned that the EIB had previously invested in the Fonds National de Garantie pour le Développement Technologique, promoted and managed by SOFARIS. Taking these initiatives overall, the level of EIF co-financing stands at around 30%.
In parallel with this strong commitment alongside the French public authorities in support of the financing of innovation, EIF's other investments in France have contributed towards financing 32 funds promoted by private investors, covering a broad range of sectors from seed capital through to development capital.
This high volume of activity reflects the relative buoyancy of the French venture capital market compared to what is continuing to be observed in other European countries. Thus the first half of 2005 saw a substantial level of fund raising: EUR 7.8 billion against EUR 865 million in the first half of 2004. The role played by the public authorities via CDC PME has undeniably contributed to this positive trend by mobilising other investors, notably the banking sector.
Against this backdrop, EIF will continue its policy of investing in both the high-tech seed capital sector and funds focusing on start-ups or development capital, thereby fulfilling its objective of supporting Community policies, the foremost of which are innovation promotion and job creation.
Furthermore, EIF's activity will develop in the framework of new initiatives, particularly in the area of technology transfer. These are aimed at fostering and supporting the establishment of new investment vehicles by research centres so as to help bring their products to market. Such initiatives, which are currently at the preparation stage, are likely to bring together French and foreign centres. They will subsequently be financed with Community resources during the period 2007-2013.