The European Scale-up Action for Risk capital (ESCALAR) is a new pilot programme launched by the EIF using EFSI resources to address the financing gap experienced by high growth European companies (scale-ups).
ESCALAR invests in funds with an investment focus on scale-ups. It can support both new funds needing to achieve a larger critical mass to support such companies in their future portfolio, and existing funds seeking additional capital to make follow on investments in scale-ups in their existing portfolio.
With up to EUR 100 million in single fund commitment possible, ESCALAR’s investment is intended to substantially increase fund resources, thus allowing larger investment tickets and creating greater capacity for making (follow-on) investments in scale-ups.
How does it work?
ESCALAR will make equity investments in funds, and side vehicles of funds, through a different share class or fund unit to other investors. ESCALAR investments will have different terms to the investments made by other investors, namely a (1) Preference on fund distributions in certain predefined downside scenarios, and (2) Subordination, and reduced claim, on investment returns.
An investment from ESCALAR can enhance the risk-adjusted returns to LPs, thereby attracting investors to the asset class and crowding in private capital for Scale-ups.
For this pilot programme, ESCALAR will have a total investment envelope of EUR 300 m.
Financial intermediaries interested in receiving an investment from EIF under ESCALAR can apply by downloading and submitting the relevant application documents by 30 June 2020 (date of reception by EIF). Applications will be assessed by EIF for pre-selection on the basis of the Expressions of Interest, on a “first come, first served” basis.