Through Regulation (EU) No 346/2013 on European social entrepreneurship funds (the EuSEF Regulation), AIF managers were given the possibility to use the designation EuSEF (European Social Entrepreneurship Funds) when marketing alternative investment funds (AIFs) that invest in social enterprises within the EU.
The EuSEF regulation is a special regulatory framework that AIF managers may choose to apply if they wish to use the designation EuSEF (European Social Entrepreneurship Funds) when marketing qualifying funds for social entrepreneurship within the EU. To use the EuSEF designation, the AIF manager must be established within the EU, be registered in accordance with article 3.3 or authorised in accordance with article 6 of Directive 2011/61/EU (the AIFM directive), and manage qualifying social entrepreneurship funds.
The purpose of the EuSEF designation is to make it easier for investors to identify such funds, to support the financing of social enterprises, and to facilitate capital raising for fund managers investing in these companies.
Qualifying social entrepreneurship funds are alternative investment funds (AIFs) that invest at least 70 percent of their committed capital and uncalled capital commitments in qualifying investments. Up to 30 percent of the capital may be used for other assets. Qualifying investments include equity or quasi-equity instruments issued by qualifying portfolio undertakings. A qualifying portfolio undertaking is an entity that, at the time of investment, is not admitted to trading on a regulated market or a multilateral trading facility, has the primary objective of achieving, measurable and positive social impacts, primarily uses its profits to achieve its main social objective, and is managed in a responsible and transparent manner.
Registered AIF managers wishing to use the EuSEF designation when marketing qualifying social entrepreneurship funds must notify the Swedish Financial Supervisory Authority of their intention. Authorised AIF managers must instead, apply for the registration of such funds.
Regulation (EU) No. 346/2013 on European social entrepreneurship funds
Directive 2011/61/EU on Alternative Investment Fund Managers
Summary of: Regulation (EU) nr 346/2013