Special permission from the EU to extend the Venture Capital Programme in Hungary 5 August 2013
With the decision made by the European Commission Hungary received special permission to extend its SME venture capital programme financed from EU funds. In the future the Széchenyi Capital Fund will be able to realize larger value investments; by involving partner investors the individual limit value for investments can increase to as much as EUR 750 thousand. EU funds need to be involved in order to strengthen the capital position of the Hungarian SME circle since some enterprises have no other alternatives for raising capital for their capital requirements ranging from HUF 75 million to 200 million. With the permission the Széchenyi Capital Fund is even allowed to involve a financier for certain investments.
• Permission has been granted by the European Commission to the Széchenyi Capital Fund, operated in the framework of the New Széchenyi Plan, to launch new investment schemes in order to meet the capital requirements of the Hungarian SME sector. The new form of capital investment, which allows the Fund to make capital allocations in cooperation with private investors, also extends the range of investment opportunities and thresholds. This way the set of financing instruments of Hungarian SMEs is complemented by another capital-based, repayable funding.
• Based on the authorization granted by the European Commission the Széchenyi Capital Fund will announce three new capital investment schemes that allow to raise capital well exceeding the former EUR 200 thousand (de minimis) threshold reaching as much as EUR 750 thousand. The repayable capital resource is available for Hungarian SMEs that have been operating for at least two years and have a sales revenue of less than HUF 2 billion for the purpose of achieving their growth and development plans. There are more options for raising capital, independently or in cooperation with partner investors.
Additional information:
Széchenyi Tőkealap-kezelő Zrt. (Széchenyi Capital Fund Management Co.Ltd.) is a fully state-owned business association, the ownership rights of which are exercised by the National Development Agency. The Company is responsible for transmitting the HUF 14 billion funding from the Széchenyi Capital Fund, established from the budget of the Regional Operational Programmes, to the Hungarian SME sector in the form of definite term capital investment. 85% of the Fund’s HUF 14 billion budget comes from EU funding. The fund management company aims to support 80-100 projects until the end of 2015; its capital investment activities are conducted in line with the predefined and transparent investment policies where the decision-making is supported by an elected professional investment committee.
The mission of Széchenyi Capital Fund is to provide predominantly capital support in all regions for enterprises that are innovative and significant for the national economy, but mostly operate in sectors falling outside the interest of venture capital investors on the market. This way the Fund’s investment policy stimulates economic growth, the increase of employment, the development of lagging regions and serves the efficient regional allocation of the available EU funding.
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