Topic of the practice
Level of co-financing (leverage effect) produced with the financial instrument, leverage effect can be developped at fund or deal level
Good Practice Information
The identification of co-funders was a selection criterion of the call for tenders launched to select the fund manager. Indeed, the tenderers had to bring in co-investors whose contribution would be equivalent to the ERDF financing (1:1). The winning tenderer managed to find three co-funders (two private and one mixed private/public), who primarily joined the fund because of their confidence in the aptitudes of the fund manager to generate a positive yield. In this way, the co-funders joined the fund on the basis of the reputation and the trust in the fund manager and FEI setup suggested by the fund manager.
Evidence of success
This good practice overcomes difficulty to find co-investors in the fund. The call for tenders launched for fund manager gave the tenderers wide opportunities to influence the design of the FEI. Winning tenderer discussed the design of the FEI with potential co-funders, suggesting a FEI setup that supported the co-funders confidence in the aptitudes of the fund manager to generate a positive yield.
Contact details to obtain further information on the practice
Jens Kastrup Kjersgaard
Central Denmark Region / Region Midtjylland
Annex completed on: 10-21-2013