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European Investment Fund investing more in venture sector

European Investment Fund (EIF) invested just over E800m into venture capital funds in 2001, well over double the amount invested the previous year, according to new figures.

EIF invested $800.1m in 57 venture capital funds in EU and accession countries, focusing on the early stage and technology sectors.

The announcement lifts some of the gloom hanging over the European fund raising market, suggesting that institutional players are beefing up their allocation to private equity despite recent market jitters.

‘The intense investment activity of the EIF in venture capital, in supporting technology and high growth SMEs, played an important role in this time of considerable market disruption,' said Walter Cernoia, chief executive of EIF.

The amount committed by major organisations such as the EIF to the venture sector has been boosted by a recent wave of European reforms. In particular the EIF has restructured its operations in light of the ‘reform' of June 2000, which has increased the amount of capital available for the venture sector.

Such developments have also contributed to a more balanced geographical spread of venture capital investments, with a greater proportion now committed to southern European and accession countries.

The accession countries received E65m of the E800m committed, while Greece and Portugal received their first EIF commitments towards the end of 2001. A total of E49m was invested in the form of EU budgetary funds via the ‘EIF start-up' scheme for smaller or regional funds.

Based in Luxembourg, the EIF was established in 1994 as a joint venture between the European Investment Bank, the European Commission, European banks and other financial institutions.

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