European Venture Capital and Social Entrepreneurship Funds

The Alternative Investment Fund Managers Directive (“AIFMD”) is now effective [as of 22 July 2013].  In conjunction with the AIFMD, the following directly applicable regulations are also now in force, effectively creating 2 new regimes for funds wishing to invest in European Small and Medium Enterprises (“SMEs”):

• Regulation (EU) No. 345/2013 on European venture capital funds (“EuVECA”); and
• Regulation (EU) No. 346/2013 on European social entrepreneurship funds (“EuSEF”).

EuVECA

The main purpose of EuVECA is to provide a common framework for European venture capital funds in order to:

• stimulate economic growth;
• contribute to the creation of jobs and capital mobilisation;
• foster the establishment and expansion of innovative undertakings;
• increase undertakings investment in research and development; and
• to foster entrepreneurship, innovation and competitiveness.

EuSEF

The main purpose of EuSEF is to provide a common framework for European social entrepreneurship funds by providing funding to social undertakings that are acting as drivers of social change by offering solutions to social problems.