20-25% of UK PE and VC funds managers in the mid-to-lower-market will be impacted if the UK withdraws from the EU and loses access to the EIB.

In a recent academic article# we highlighted the importance of EIB funding to the UK private Equity and Venture Capital markets. In that article we highlighted, but did not quantify, the scale of this involvement. We argued that, despite British Business Bank, the UK has no credible alternative source of funds to replace the EIB/EIF investments and that without a policy response, this will impact the availability of funds to the UK mid-market and early stage businesses in a future where BREXIT creates many serious challenges and opportunities.

EIB has been particularly important as a cornerstone investor giving momentum to new funds and managers.

The table below puts hard numbers around that position.

Table 1: EIB Fund Investments in UK only PE/VC Funds 

* Total less than sum of column due to multiple funds managed by a single fund manager.

The EIB is an investor in 62 UK (only) funds managed by 42 fund managers.  In addition EIB invested in 235 multi-country funds, some, but not all of which are based in the UK and can invest in the UK. We have not done an exhaustive analysis, but we can see that at least 12 of these funds are predominantly UK focussed.

The UK Private equity industry body, the BVCA, has around 260 full members who are investment managers. Therefore EIB is invested in at least 20% (54/260) of all UK PE/VC fund managers and in reality probably more. The BVCA has many GP members who are not it in the mid-market. As the EIB invests in mid-market, VC and below, the real significance of its investment is materially more important than this analysis suggests

Therefore, we estimate that at least 20-25% of UK PE and VC fund managers in the mid to lower market will be impacted if the UK withdraws from the EU and loses access to the EIB.

The analysis is not comprehensive, further work is needed.

(#Wright, Mike and Wilson, Nick and Gilligan, John and Bacon, Nick and Amess, Kevin, Brexit, Private Equity and Management (October 2016). British Journal of Management, Vol. 27, Issue 4, pp. 682-686, 2016. Available at SSRN: https://ssrn.com/abstract=2856747 or https://dx.doi.org/10.1111/1467-8551.12191)  

Source: Primary analysis of EIB public Data