Financial Product Design Study: Exchange Listed SME Investment Vehicles as a New Financial Instrument in EBRD's Countries of Operation

Location:

Regional

Business sector:

Financial institutions

Project number:

66029

Funding source:

EBRD Shareholders SF

Contract type:

Consultancy Services

Notice type:

Invitation for expressions of interest (CSU)

Issue date:

08 Sep 2016

Closing date:

28 Sep 2016   at  23:59   London

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Project Description:

The overall objective of the project is to recommend the most suitable design for a listed SME investment vehicle that can increase the access to capital markets based financing for companies, especially for small and medium sized enterprises (SMEs) in EBRD’s countries of operation. In some countries listed investment vehicles (LIVs) i.e. similar to special purpose acquisition companies (SPACs), Venture Capital Trusts (VCTs) or Capital Pool Companies (CPCs) are quite popular. They are collective investment structures incorporated with the sole purpose of raising money through initial public offerings (IPOs). The stock exchange listed investment vehicles will then use the IPO proceeds to invest into target businesses within a given timeframe. Currently, the Bank is analysing if locally listed investment vehicles are feasible in EBRD’s region to increase the access to capital market financing for companies (the Project).

Assignment Description:

EBRD intends to retain a consulting company (the Consultant) to (a) identify pre-requisites for successfully listing SME investment vehicles and recommend focus countries in EBRD’s region, (b) design the optimal structure of the recommended listed investment instrument, prepare a detailed implementation plan for the launch in at least two identified pilot countries and build the local capacity to ensure support for the launch of the product, and (c) assess the business potential for EBRD and estimate the transition impact of EBRD’s involvement (the Assignment).

The expected outcome of the Project is a detailed concept report/design study including the optimal set-up and design of SME listed investment vehicle(s), two recommended pilot countries and identified/agreed product sponsors in each of the proposed countries, which enables EBRD to promote such a listed instrument in its countries of operation.

The selected Consultant is expected to provide the following services:

1. Identify types of listed investment vehicles and potential pilot countries

(a) identify and describe categories/types of listed investment vehicles including innovative approaches which have been proved to be successful based on international experiences;

(b) prepare a set of case studies of listed investment vehicles and their impact on SME equity and/or debt financing and local capital market development;

(c) identify pre-requisites for the successful listing of various types of investment vehicles in emerging markets (i.e. legal/regulatory/tax environment, product sponsors, investor base, market segment …) based on international experiences;

(d) develop a methodology for ranking EBRD’s countries of operation according to the feasibility of successfully launching a listed investment vehicle segment/scheme;

(e) rank all EBRD’s countries of operation according to the developed methodology and based on the ranking recommend at least two pilot countries in EBRD’s region which would have the highest chance for successfully launching listed investment vehicles; and

(f) prepare an Assessment Report

2. Design the optimal structure of the recommended listed investment vehicle

(a) recommend the design and optimal structure of the recommended listed investment vehicles;

(b) recommend the corporate governance structure;

(c) recommend the legal, tax and regulatory base and any other requirements which have to be in place to successfully launch the recommended investment vehicles (it is assumed that the pilot countries will have most of the pre-requisites for a successful launch already in place);

(d) recommend the listing place and the market segment in the proposed pilot countries;

(e) estimate formation, management, issuance and listing costs (i.e. including legal, overhead, accountancy, underwriting, etc.);

(f) identify and recommend potential product sponsors;

(g) recommend investment strategy/strategies;

(h) recommend investment type (i.e. equity, debt);

(i) identify the retail and institutional investor base;

(j) define investor protection measures;

(k) prepare an implementation plan for the pilot countries with clear tasks and responsibilities;

(l) prepare a set of presentation slides;

(m) build the local capacity to ensure support for the launch of the recommended product through workshops and/or roundtables;

(n) prepare a set of presentation slides; and

(o) prepare a detailed Concept Report.

3. Assess the investment potential for EBRD and the estimated transition impact

(a) assess the investment potential for EBRD and the estimated transition impact;

(b) organise a roundtable to present/discuss the structure of the recommended investment vehicle(s) and the outcome of the assessment with selected EBRD teams in EBRD’s HQ; and

(c) prepare an Assessment Report.

The Terms of Reference for the assignment are available via this link.

Status of Selection Process: Interested firms or group of firms are hereby invited to submit expressions of interest via eSelection (see submission requirements and notes).

Assignment Start Date and Duration: The Assignment is expected to start in October 2016 and has an estimated overall duration of 4 months.

Cost Estimate for the Assignment: EUR 244,680 (exclusive of VAT).

The Consultant must determine whether any VAT would be chargeable on the services and the basis for that determination, without taking into consideration the special status of the Bank as an IFI and state this to the Bank in their response to the Invitation for Expressions of Interest. To the extent that a Consultant incurs input VAT on goods and services purchased in connection with the provision of services (e.g. VAT on airline ticket) which is not otherwise recoverable by the consultant from the local tax authority, the gross cost to the consultant of such expenses shall be treated as a reimbursable expense.

Funding Source: It is expected that the Assignment will be funded by the EBRD Shareholder Special Fund (SSF).

Eligibility: There are no eligibility restrictions.

Consultant Profile: Corporate services are required. The Consultant will be a firm or a group of firms with experience in:

1. Listed financial product design and in-depth understanding of international standards as well as the regulatory and technological framework;

2. Design/development and launch of listed investment vehicles/financial products;

3. Knowledge of the set-up and management of i.e. SPACs, VCTs, CPCs, investment funds, private equity/venture capital funds;

4. Working with market operators, authorities, financial intermediaries and capital market participants on similar consulting assignments;

5. Utilizing its financial industry and capital market contacts for the identification of potential product sponsors/management companies.

The Consultant's expert team is expected to include key experts as follows:

(a) Team Leader/Capital Markets Expert

  • Preferably 10 years professional experience related to capital markets;
  • Preferably 5 years of project management experience including acting as Team Leader on similar assignments;
  • Experience in the design of exchange listed financial instruments, i.e. Special Purpose Acquisition Companies (SPACs), Private Equity (PE) Funds, Venture Capital (VC) Funds, and Investment Funds (IFs);
  • Excellent knowledge of international standards and EU Directives (especially UCITS, AIFM, MiFID2/MiFIR);
  • Acted as a team leader in preferably 2 similar projects;
  • Previous experience on i.e. SPAC PE, VC or IF level is preferred;
  • Excellent communication, analytical, report writing and presentation skills;
  • Proficiency in written and spoken English language.

(b) Pool of Listed Investment Vehicles Experts

  • Preferably 5 years of experience in the set-up and management of listed investment vehicles (i.e. SPACS, VCTs, CPCs, PE, VC, IF…) and/or the management of PE/VC funds;
  • In-depth understanding of current trends and developments in increasing SMEs access to capital market financing;
  • Practical experience in setting up listed investment vehicles;
  • Excellent knowledge of international standards and EU Directives (especially UCITS, AIFM, MiFID2/MiFIR);
  • Acted as an expert in preferably at least 1 similar project;
  • Excellent communication, analytical, report writing and presentation skills;
  • Proficiency in written and spoken English language.

(c) Legal and Regulatory Expert

  • Preferably 5 years of professional experience as a legal and regulatory expert with focus on legal and regulatory review and the design/set-up of listed LIVs;
  • As a minimum a Master degree or equivalent in legal studies;
  • Acted as legal/regulatory expert in at least one similar projects;
  • Excellent knowledge of international standards and EU Directives (especially UCITS, AIFM, MiFID2/MiFIR) and their application;
  • Preferably, knowledge of the legal and regulatory environment in EBRD’s countries of operation;
  • Excellent communication, analytical, report writing and presentation skills;
  • Proficiency in written and spoken English language.

If one expert can cover various expert roles this has to be clearly stated in the Expression of Interest and reflected in the CV(s) and the proposed methodology/work plan accordingly. It is important that at least one expert has relevant contacts to potential product sponsors.

Submission Requirements:

In order to determine the capability and experience of Consultants seeking to be selected, the information submitted should include the following:

1. Company/group of firms’ profile, organisation and staffing (max. 2-4 pages).

2. Details of previous project experience or similar assignments particularly undertaken in the previous five years, including information on contract value, contracting entity/client, project location/country, duration (mm/yy to mm/yy), expert months provided (if different from duration) , main activities, objectives.

3. CVs of key experts who could carry out the Assignment detailing qualifications, experience in similar assignments, particularly assignments undertaken in the previous five years, including information on contracting entity/client, project location/country, duration (mm/yy to mm/yy), expert months provided, assignment budget, main activities, objectives.

4. Brief technical proposal for assignment implementation, including the Consultant’s understanding of the objectives, the proposed approach and methodology to a successful delivery of the Assignment, a work plan with milestones, and a team input summary indicating the number of working days allocated to the Assignment by each Key Expert.

No financial proposal is required to be provided as part of the expression of interest.

5.Completed Consultant Declaration Form and Contact Sheet, the template for which is available from the following web-link:

http://www.ebrd.com/pages/workingwithus/procurement/notices/csu/contact_sheet.doc.

The above information should not exceed 30 pages (excluding CVs, Consultant Declaration and Contact Sheet).

The complete expression of interest (including technical proposal, CVs, Consultant Declaration and Contact Sheet) should be submitted, in English electronically through eSelection, to reach the Bank not later than the closing date. The expression of interest shall be one file (pdf). The EBRD reserves the right to reject applications of firms submitting more than one file. Only if the permissible file size is exceeding (4MB), the Consultant may split the expression of interest into further files.

Bank Contact Person:

Elena Kolodiy

Technical Co-operation

European Bank for Reconstruction and Development

One Exchange Square

London EC2A 2JN

Tel: + 44 20 7338 6765

e-mail: kolodiyo@ebrd.com (submissions should be sent through eSelection and NOT to this email address)

Important Notes:

1. The selection will normally be made from responses to this notification only. Consultants will not be asked to submit a proposal. The highest-ranked Consultant will be selected and be invited to negotiate the contract.

2. The evaluation criteria are:

(a) Firm's previous project experience in listed financial product design and in-depth knowledge of international standards as well as the regulatory and technological framework; design/development and launch of listed investment vehicles/financial products; knowledge of the set-up and management of i.e. SPACs, VCTs, CPCs, investment funds, private equity /venture capital funds; working with market operators, authorities, financial intermediaries and capital market participants on similar consulting assignments; and utilizing its financial industry and capital market contacts for the identification of potential product sponsors/management companies as a part of the project. - 30%

(b) CVs of the key experts. - 40%

(c) Quality of the Consultant’s technical proposal. - 30%