Richard Pelly, chief executive of the European Investment Fund (EIF), an asset management arm of the European Union and the largest investor in venture capital funds in the continent, said he was preparing to expand its operations into direct investing and microfinance as well as working more closely with corporate venturing units.
Pelly, who has been chief executive of the fund that commits about €1bn per year in venture and growth equity and mezzanine debt since 2008, said it might be moving to support micro-finance, which are traditionally loans to individuals outside of the traditional banking system, buying blocks of debt using its large credit analysis team, and co-investing in nascent businesses alongside venture capital firms.
In a panel at the European Private Equity and Venture Capital Association’s conference, Pelly denied industry concern that the EIF was constrained by geography. He said: "We are not bound by such a nonsensical government policy" and have possible investments in European funds that have a US office.
"We can get there by clever structures and are not bound by the blue book [of rules]. The EIF can sit alongside the big US limited partners and want to be seen as a catalyst for new pots of money to come into Europe."
He added that although co-investing was not part of the model, "corporate venturing in life sciences has been a great model where the players [companies] have not eaten the GPs [venture capital firms] for breakfast and squeezed them out. There is capacity in corporations and we [the EIF] want to work intensively with them."