PME, the €45bn pension fund for the metal and electro-technical engineering industry, has invested €25m in starting technology firms in its own sector.
It said that the investment – through a new fund which co-operates with local technical universities – was designed to boost the industry it represented.
The fund, Innovation Industries, targets investments in Dutch companies specialising in areas such as semi-conductors, ICT and cybersecurity, nanotechnology, healthcare, and food production.
A number of these companies are expected to be spawned by research from universities in Delft, Twente, Eindhoven, and Wageningen, as well as the research institutes TNO (technology), ECN (energy and transport), and DLO (agriculture).
Other investors have already committed €75m to Innovation Industries, which is to issue risk-bearing capital – in particular equity – to approximately 20 firms.
So far, PME and the European Investment Bank (EIB) are the largest investors, with the universities of Eindhoven, Twente, and Wageningen contributing €1.5m each.
Other investors include TNO, innovation funds of the Dutch counties of Overijssel and Gelderland, and some private investors.
This is the first time PME has invested in start-up companies or companies in its own sector. However, it changed this policy as part of its new environmental, social, and governance policy introduced last April.
In a clarification of its new position, the metal scheme described investing in the future of its sector as “an important additional motivation”, adding that its participants were keen on such a policy.
It added that the investment fund was supported by several high-tech firms that had placed their pensions with PME. The scheme did not provide details about the companies.
According to PME, the relatively limited scale of the investment was not unusual for a niche destination. The scheme emphasised that the investment was nevertheless useful, as it was beneficial for the industry, innovation, and the local economy.
Innovation Industries was selected following consultations with the Dutch Investment Institution (NII) about the options for local investment.
The metal pension fund said it expected a solid return proportional to the relatively high risk of investing in start-ups.
However, it put the risk into perspective by explaining that it would be limited because of knowledge-sharing between the universities and research institutes. It added that the new firms would also be coached while growing.
PME further said that costs incurred by the investment fund would be “at the lower end of the spectrum” compared to other similar funds in Europe.