Ebb & Flow
The European Investment Fund (EIF) is planning to become a more proactive player in the EU biotech sector, stepping in to fill what it sees as a shortfall of venture capital available for privately held European biotech companies.
EIF was formed in 1994 by the European Commission to support the creation, growth and development of small- and medium-sized enterprises (SMEs). The fund is majority owned by the European Investment Bank (EIB), which holds a 61% stake, the European Commission owns 30%, and European banks hold the remaining 9%.
About 20% of EIF's E2.5 billion ($2.7 billion) in capital is dedicated to biotech venture fund investments. The remainder is invested in other sectors and guaranteed instruments.
The proposal being discussed would change EIF's remit, which allows it to invest only in European venture funds. What EIF now wants to do is invest directly in companies, specifically in the biotech and nano technology sectors.
"We want to find a way to aid companies in the current markets," said Marc Schublin, head of coordination at the fund. "The sector needs cash to grow, and as we are seeing today, cash is hard to find. Many early-stage funds are now dead, but some still have portfolio companies that are worth saving."
EIF is looking to support some of its indirect investments in companies that were made via its venture fund investments. EIF is considering setting up a strategic investment vehicle