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Instituição Financeira de Desenvolvimento S.A. (IFD)

Instituição Financeira de Desenvolvimento S.A. (IFD)

IFD is the Portuguese promotional institution. It was incorporated in 2014 by the Portuguese State under the approval of the European Commission with the objective of improving the access to funding by local SME and midcaps. Its financing activities are exclusively wholesale and cover the full capital structure, notably through senior loans, quasi-equity and equity, and credit counter-guarantees. The creditworthiness of IFD is of local sovereign quality based on sound prudential ratios and an implicit sovereign guarantee.

IFD operates both through its balance sheet, e.g. on-lending to commercial banks, and off-balance sheet through 3 funds-of-funds under its management (€534 million). One of these funds is dedicated to loans and credit guarantees, the other two are dedicated to equity investments, under a number of sub-products and fund calls, notably in i) business angels investment firms (3 calls), ii) seed and early-stage venture funds (2 calls), and iii) private equity funds focused in Portugal (1 call). The sources of funding of these equity funds are of two types: national budget and ESIF.

Within the scope of its relationship with multilateral financial institutions, IFD obtained a financing line from the Council of Europe Development Bank (CEB) for € 100 million to finance SMEs. However, it has been with the European Investment Bank Group that most initiatives have been implemented. Examples of this are the approval of long-term lines of financing worth € 350 million, the Portugal Tech partnership between IFD and the European Investment Fund, to capitalize technology-based companies; the election of IFD to be part of the select group of 10 institutions that make up the Consultative Forum of the EIF Equity Platform, a forum accessing and sharing information on financial capital instruments operated by the EIF in partnership with other National Promotional Institutions under the aegis of the European Commission. IFD also entered into a Memorandum of Understanding with the European Investment Advisory Hub, to strengthen the investment environment and improve the quality of investment projects promoted by Portuguese companies.

Since its inception, IFD worked on building a network of financial intermediaries by selecting, through open, transparent and competitive procurement procedures 15 venture capital funds, 59 business angels companies, the National Mutual Guarantee Scheme and 14 credit institutions.

IFD ended 2018 with a solvency ratio of 290.75%. Its banking product increased from € 1.4 million in 2017 to € 1.6 million in 2018.

 

2016

2017

2018

Total net assets

105 223 403 €

100 078 917 €

100 001 363 €

Solvency ratio (CET1)

96%

208%

291%

Amount of contracted financing

0 €

0 €

200 000 000 €

Financial margin

274 591 €

197 410 €

104 580 €

Banking product

1 330 842 €

1 402 623 €

1 586 690 €

Cost-to-income

85%

89%

121%

Return on average assets (%)

0.17%

0.13%

-0.34%

Return on equity (%)

0.18%

0.13%

-0.34%

As of 31 December 2018, IFD managed a financial capacity for the economy of an overall amount of around € 2.5 billion, combining ESIF, the national component, private component and approved lines of financing with multilateral institutions.

Financial Instrument

Overall Allocation (millions of euros)

Line Capitalizar Mais

1 000 €

Line of Financing for Special Purpose Vehicles Owned by Business Angels

70 €

Line of Financing for Venture Capital Funds

204 €

Line 200M Co-investment Fund

200 €

IFD Line Capitalizar Mid-Caps

500 €

IFD Line Restart and Modernise

300 €

IFD Line Small Businesses

100 €

IFD-EIF Line Portugal Tech

130 €

Total

2 504 €

In 2019, work was initiated on implementing the Fund of Funds for Internationalization (€100 million) aimed at providing support to Portuguese companies to develop their cross-border projects.

Contact

European Long-Term Investors a.i.s.b.l.
Rue Montoyer 51
B - 1000 Brussels
Belgium
secretariat@eltia.eu