For the first time ever, a group of eleven leading Nordic and other European public investors came together at Grand Hotel in Stockholm on November 23, to agree on joint advice on EU and national policies for more effective financial instruments.
- Only to have gathered all these players is a major advance, says Ivar H. Kristensen, Managing Director at Nordic Innovation, the organization behind the exclusive network called the Nordic-European Public Investor Initiative.
The members represent eight countries in Northern Europe: Norway, Finland, Sweden, Iceland, Estonia, Germany, Scotland and Poland, as well as the European Investment Fund.
The aim of the Initiative is to facilitate exchange of best practise in the field of risk capital and to formulate practical measures to develop efficient financial instruments. In order to achieve the latter, the members are jointly responding to the European Commission’s Regional Development Fund (ERDF) Regulations for the 2014-2020 Programming Period. By doing so, they hope to increase the impact of regional funds and thereby strengthen the competitiveness of European business life on all levels.
- We have a similar attitude towards investment and public policy, and this attitude can be expressed considerably stronger together than separately. The chance for the Commission to listen to us is much more likely when we stand united, says Pat McHugh, Investment Director at the Scottish Investment Bank.
“Cooperation a value in itself”
The members of the Initiative have considerable experience of developing and implementing public policy to address market failure in the European early stage risk capital markets and utilizing large ERDF in the capitalization of financial instruments. Together, the national public investors have holdings in 1.600 companies and manage more than 3 billion euro.
Johan Bjørkevoll, Investment Manager at Innovation Norway, expressed his satisfaction with the establishment of the network.
- If we always play alone we will not improve. We need to play with others, also when it comes to innovating, in order to learn and get inspiration from others. The cooperation is a value in itself and in addition we are more interesting to listen to as a group, he stated.
In connection with the network meeting, the Nordic-European Public Investor Summit took place in the Swedish capital. Among the speakers were Antonio Concalves, DG Regio at the European Commission, presenting the development of future EU policy for financial instruments, Jean-David Malo, DG Research & Innovation at the European Commission, discussing the financing of European growth and Matthias Ummenhofer, Head Equity Fund Investments at the European Investment Fund, presenting European tools and models for investing.
The report Obstacles to Nordic venture capital funds was also published, as an update of the first copies from 2006, 2007 and 2009. It describes obstacles for transnational investments into Nordic venture capital funds and the difficulties to set up fund structures of international standard in the Nordic countries. Although positive changes to regulations have been made, new obstacles in different forms have emerged. The group behind the report consists of legal experts from the Nordic countries as well as a Nordic private equity advisory firm.
Behind the Initiative
The private Nordic venture capital market is under pressure. Several factors make it difficult for venture capital funds to attract and raise capital to new funds. Many of the Nordic venture capital funds have not delivered the returns expected by their investors and the financial uncertainty have made investors more risk adverse and less willing to invest in venture capital.
More capital is also managed by a smaller number of asset managers that invest large amounts of capital in each fund, making it difficult for them to invest in venture capital funds, which by design are relatively small. Neither has the trend within asset management favored the European venture capital market. In this context public investing has become even more essential for the market and enhancing the output of public investing is an important task.
- The Initiative extends the Nordic model for cooperation to the whole of Northern Europe and the joint advice for effective policy making will have a large impact on the future of Nordic innovative companies, Ivar H. Kristensen says.
The development of new innovative companies is vital for the future of Nordic, as well as European, business life. Nordic Innovation has executed projects within venture capital since 2004 and will continue to catalyze and support Nordic cooperation and thereby promote Nordic innovations.
The Nordic-European Public Investor Initiative
Nordic Investment Solutions
Finnish Industry Investment, Finland
Innovation Norway, Norway
New Business Venture Fund, Iceland
Estonian Development Fund, Estonia
Scottish Enterprise, Scotland
European Investment Fund
The Nordic Legal Project
Nordic Investment Solutions
Mannheimer Swartling, Sweden
Wikborg Rein, Norway
Nordic Investment Solutions, Sweden