Private equity enables unlisted private companies to obtain start-up and development financing.
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.
FEMIP provides equity or quasi-equity funding (participating or mezzanine loans) from its budgetary resources, mainly to small and medium-sized enterprises. It makes participating loans to selected micro-credit associations.
Our private equity operations have several unique 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 finances. This often allows 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.
|FEMIP resources||Risk Capital Facility||FEMIP Trust Fund|
|Objectives||Promote the creation or strengthening of the capital base of productive enterprises, particularly those established in partnership with EU-based companies.||Complement the Risk Capital Facility by broadening the range of private equity instruments available to the private sector in the Mediterranean partner countries.|
|Beneficiaries||Mid-sized companies, SMEs, investment funds, microfinance institutions|
|Type of funding and selection criteria||
Direct equity participations, possibly as co-investments with local banking partners
Quasi-equity type operations (e.g. convertible loans, participating loans)
Equity participations in venture capital / private equity funds (fund of funds activity).
Participation in guarantee funds or privatisation initiatives.
Participation in seed capital funds.
Supporting the creation and development of microfinance institutions.