dublin, 17 may 2017 - irish funds · 2017. 5. 19. · 19/05/2017 european investment bank group...

22 irishfunds.ie

Dublin, 17 May 2017

Investing for the future

Seminar on

Real Economy Investing

33 irishfunds.ie

Agenda

8:30 – 8:35 Welcome

8:35 – 9:05 EIB presentation

9:05 – 9:50 Panel session

9:50 – 10:05 Q&A

10:15 Closing remarks

19/05/2017 European Investment Bank Group

Real Economy Investing Seminar

European Investment BankCormac Murphy, Christopher Knowles, Barbara Boos, Benoit Dardenne

Dublin, 17 May 2017

The EIB: The EU Bank

• Natural financing

partner for the EU

since 1958

• Around 90% of

lending/investments

are within the EU

• Shareholders: 28 EU

Member States

Investing in

Europe’s growth

19/05/2017 European Investment Bank Group 5

EIB Group Financing in 2016: EUR 83.8bn


SignaturesEFTA &

Enlargement Countries

EUR 3.35bn

Eastern Neighbours

EUR

1.65bn

Africa, Caribbean,

Pacific, South Africa

EUR 0.77bn

Asia and Latin

America

EUR

0.98bn

Southern Neighbours

EUR

1.63bn

European

Union

75.4bn

Outside EU

EUR 8.38bn

EUR

Total EUR 83.8bn

The World’s Largest Supranational Borrower

Europe 68%

Asia 19%

Americas 11%

Middle East & Africa 2%


Total 2016 borrowing: EUR 66.4bn

Mobilising resources worldwide

We are the largest

issuer of green

bonds

EUR 3.8bn

in 2016

EUR 15bn

in 11 currencies

since 2007

We Deliver Impact Where It’s Needed


JOBS4.4m jobs in small

businesses

HEALTH10m people with

access to improved

health services

EDUCATION890 000 students

benefiting from EIB

projects

WATER25m people

benefiting from

safe drinking water

TRANSPORT960m additional

passengers

ENERGY4m households

powered by EIB

projects

URBAN120 000 households

in social and

affordable housing

DIGITAL11m people with

new or upgraded

connections


EIB lending instrument

For Investment Grade operations

Projects

Public Sector

Financing

Project Finance

Direct Loans

Intermediated

Loans

Project Finance

with direct

project risk

Risk SharingEquity & debt

through Funds

Banks

EIB special activities

For Low and Sub Investment Grade operations

The EIB’s Products

In 2016, the EIB financed €84bn of projects through an extensive range of

instruments at investment and sub-investment grades of risk.

The EIB Group Fund Activities


Providing finance and expertise for

sound and sustainable investment

projects, including through

infrastructure and environmental

funds in Europe

Leading developer of risk financing

for innovative SMEs, including SME

private equity and venture capital

funds

EIB’s Rationale for Fund Investments


1

2

3

4

Support fund managers investing in our target sectors in-

line with our policy goals (growth, climate & employment)

Jump-start first time fund managers or strategies in our

target sectors

Crowd-in private capital from co-investors at fund level

and debt at project level to maximise impact

Promote ILPA best in class practices in the fund industry

Our Catalytic Effect


Fund investments demonstrate EIB’s catalytic effect & leveraging capacity

71.1bn12.6bn

1.8bn

As of Dec-16, EIB is

invested in 43 infrastructure

and environmental funds

Total capital raised

by these funds

Total on the ground

investment generated or to be

generated

The EIB’s Fund Activities


Encouraging private and public sector commitment of

investment, project implementation and management

experience

Enhancing the investment market complements other

initiatives and additional sources of funding (including

institutional investors)

EIB’s fund investments are split amongst three main sectors and supplemented

by the EIF’s European SME activities

Infrastructure

Environment

SMEs in emerging markets

Others via EIF

Equity (and in limited cases debt) funds investing in infrastructure

projects that fulfill EIB’s eligibility criteria

Funds investing in projects promoting climate change mitigation

(e.g. renewable energy) or adaptation (e.g. irrigation projects)

SME private equity funds focusing on emerging markets

The European Investment Fund (EIF), an EIB subsidiary, invests in

European SME private equity and venture capital funds

2016 Key Figures for Fund(1) Investments

EIB commitments after 12 years of infrastructure and environmental fund activity:

46 funds in portfolio (41 inside the EU and 5 outside, 43 active and 3 exited)

Portfolio of €1.8bn EIB commitments in €17.8bn of funds

398 projects (active portfolio), 94 projects fully exited

(1) Infrastructure and environmental funds only

Underlying Projects by Geography Underlying Projects by Sector

14

UK14%

France9%

Germany9%

Poland9%Turkey

7%Italy5%

Ireland5%

Hungary4%

Finland3%

Spain3%

Others32%

Onshorewind18%

Roads13%

Health12%

Offshore wind8%

Solar6%

Energy efficiency

6%

Biomass6%

Media/Telecom

4%

Energy(non RE)

4%

Forestry4%

Others19%


Irish Projects of EIB Invested Funds

EIB-backed funds have invested nearly €400m into projects located in Ireland

15

Project/Company Industry Fund carrying out the investment

Date of

Investment

Investment

(€m)

Foraois Growth Ltd* Forestry Dasos 2 Oct 2015 69

Glanaruddery Ireland** Onshore wind Impax New Energy Investors Apr 2015 27

Lettergull Ireland Onshore wind Impax New Energy Investors Mar 2015 1

N17/N18 Motorway Roads Marguerite 2020 Fund Apr 2014 20

Cork I (Luricawne Wind) Onshore wind HGCAPITAL Renewable Power Partners 2 Apr 2014 40

Cork 3 (Luricawne Wind) Onshore wind HGCAPITAL Renewable Power Partners 2 Apr 2014 45

Ireland Ballycadden Onshore wind Impax New Energy Investors Dec 2013 6

Galway 1+2 (Luricawne Wind) Onshore wind HGCAPITAL Renewable Power Partners 2 Sep 2013 15

Kerry I (Luricawne Wind) Onshore wind HGCAPITAL Renewable Power Partners 2 Dec 2012 33

Invis Energy development Onshore wind HGCAPITAL Renewable Power Partners 2 Sep 2011 78

Dundalk Roads DIF II Jan 2011 23

Irish Schools Education DIF II Jul 2010 16

Limerick Tunnel Roads Meridiam Infrastructure Fund Aug 2006 20

Total 395

Foraois Forestry Operations DFII School PPP Cork I Wind Farm

Additionally, the EIF has invested into 15 Irish SME funds and Co-Investment Vehicles and through its

various SME and venture capital fund investments, a significant number of Irish companies.


• Independent fund manager

• Domiciliation in accepted jurisidiction

• No funds of funds

• Preferably no sub-funds, feeders or

umbrellas

• Closed end fund (wide range of tenors)

• Fund cannot be marketed to retail investors

Substantial portion of EIB eligible investments:

• Geography (EU + neighbouring countries) or

mandate specific for outside EU

• Greenfield or substantial capex

• Socio-economic and technical criteria

• Diversification limits (geography, sector,

asset)

• EIB investment of up to €150m

• Preference for investment at first close

• Commitment equal to10-20% of fund size

• At least one investor with matching

commitment

• Ability to do co-investments (up to €50m) is a

positive

Basic Checklist for Fund Selection

EIB looks for certain basic criteria when screening funds for potential investment

Structure Fund Investment Policy

EIB Commitment


Overview of main fund structures and jurisdictions (1)

Main domiciles of funds in EIB’s portfolio (not inclusive of outside EU and

prospective investments)

Main legal forms


- Luxembourg (33)

- England (19)

- France (13)

- Netherlands (8)

- Investment companies (41 – including all 33 Lux funds)

- Limited partnerships (22 – including all 19 English funds)

- Mutual Funds (10 – all of which in France)

Overview of main fund structures and jurisdictions (2)

Limited partnerships

Most popular vehicle in anglo-saxon closed-ended fund universe

Structuring flexibility

Revamping of existing LP regimes in various jurisdictions

Removal of archaic mechanisms

Legal certainty and increased flexibility – safe harbour and LP clawback

Concrete effects in certain jurisdictions

Investment companies

Popular vehicle in (certain) civil law jurisdictions (e.g., SICAVs)

Consideration to be given to structuring flexibility

Contractual funds

(Historical) popularity in certain jurisdictions

Flexibility and substance


EIB key structuring considerations (1)

EIB philosophy: delegation model with best in class governance approach

(appropriate balance between LP and GP rights)

LP Advisory Committee (with EIB’s presence)

Proper management of conflicts of interest (Advisory Committee, restrictions on cross-

over investments etc.)

Key persons dedication

Exclusivity / restrictions on successor funds

Ability to remove for and without cause

Alignment of interest

Change of control

Skin in the game

Fund as a whole incentivisation scheme of management team



Limited liability

EIB to invest in funds protecting limited liability of investors

Legal opinion

Safe harbour for internal acts of management in modern LP regimes

Free transferability of interests / advance consent by GP/Manager to EU bodies

(problematic in structures with mandatory or contractual right of first

offer/refusal)

EIB consolidation prohibited

Maximum concentration limit

Absence of control (in particular if feeder or parallel vehicle)



Standalone vs umbrella -- Strong preference for standalone structure

Reputational and AML/KYC risk

Allocation of costs

Governance

Bankruptcy remoteness

EIB integrity package

NCJ jurisdictions

AML/CFT provisions

Audit rights


Closing remarks

Ireland is well suited to be a fund domicile for funds

Effective and proven legal structures

Sophisticated regulator

Established eco-system of advisers and service providers

Onshore jurisdiction with access to passporting

Historically EIB has not invested in Irish infrastructure and environmental funds

simply due to lack of opportunties

The General Partners/Fund Managers choose a fund’s domicile and should

therefore be the primary marketing target

Ireland has strong development opportunties lying ahead for its funds business

… and the EIB is looking forward to being offered Irish-domiciled fund

opportunities for investment


EIB in Ireland – Operational context

EIB office operational since early 2017

Strategic dialogue with government via working groups under Minister of

Finance

Excellent co-operation with state entities as natural partners – NTMA/NDFA,

TII, ISIF, EI, IDA etc.

EIB ready to step up activities (€1bn p.a.) in response to capital plan review

and other needs

Wide range of products and structures

Advisory and knowledge sharing from other EU markets

European Investment Bank Group 2319/05/2017

EIB Activity in Ireland

EUR bn 2013 2014 2015 2016

Approvals 877 946 800 737

Signatures 680 932 750 825

Disbursements 208 702 500 1000

European Investment Bank Group 24

Infrastructure30%

Environment12%

EFSI (Juncker

plan)15%

Innovation43%

EIB Track Record in Ireland

2016 split by sector

11 transactions:

• 2 project finance

• 2 universities

• 3 public sector (social housing, schools,

forestry)

• 3 corporates

• 1 fund

2016 split by transactions

19/05/2017


Christopher Knowles

Head of Infrastructure

Funds & Climate Action

Operations Directorate

[email protected]

European Investment Bank

98, Boulevard Konrad Adenauer

L-2950 Luxembourg

8 Upper Mount Street

Dublin 2

For more information please contact:

Barbara Boos

Head of Infrastructure

Fund Investment team


[email protected]

Benoît Dardenne

Counsel, New Products,

Funds Unit

Legal Directorate

[email protected]

Cormac Murphy

Head of the EIB Group

Office for Ireland


c. [email protected]

mailto:[email protected]




2626

Moderator:

Panellists:

irishfunds.ie

Investment fund structures and real economy investing

Panel Discussion

Barbara Boos, Head of Infrastructure Funds, EIB

Benoit Dardenne, Counsel, EIB

Phil Doyle, Principal, Irish Infrastructure Fund, AMP Capital

Mark White, Partner, Head of Investment Management

Group, McCann FitzGerald

Peter Stapleton, Partner, Maples and Calder

Moderator:

Panellists:

2727 irishfunds.ie

Closing remarks

27

dublin, 17 may 2017 - irish funds · 2017. 5. 19. · 19/05/2017 european investment bank group...

Documents