Dutch pension giant ABP is to invest €1bn in European venture capital funds over the next three years, partially responding to calls from Brussels for pension capital to support the European economy, Dutch financial daily Het Financieele Dagblad (FD) reported.
The investment will include an initial €250m commitment to the Scaleup Europe Fund, a Brussels initiative targeting young companies in strategic sectors including artificial intelligence, quantum technology and aerospace.
The fund is targeting €5bn, which would make it the largest of its kind in Europe. Swedish investor EQT has been appointed as manager.
FD reported the news following a podcast with ABP board chair Harmen van Wijnen, who stressed that the pension fund would retain control over its investment decisions.
“We are not the ATM for companies or governments that need money,” he said, adding that investment decisions should instead be viewed as a triangle involving an initiator, an actor that executes the initiative and a supporter.
“You have an initiator who wants something, you have an actor who executes something, and you have a supporter. We are in the support role. The mistake governments often make is that they do not go to those actors, but look to us as pension funds first.”
Brussels is currently debating a proposal that would require pension funds to allocate 2% of their invested assets to venture capital. For ABP, that would amount to more than €11bn.
The proposal has faced opposition from pension funds and Dutch members of the European Parliament, who argue that pension funds should retain control over their investment policies.
ABP said the independence of the Scaleup Europe Fund and its governance were important factors in its decision to invest. The European Commission’s own €1bn commitment was also viewed as a positive signal.
“For us, it was particularly important that the governance was in order,” said Van Wijnen, noting that Europe had substantial innovative capacity but struggled to turn research and technology into commercial growth.
“If you follow the chain from fundamental research through patents, start-ups, and scale-ups to large technology companies and unicorns, you see that Europe is finding it increasingly difficult to compete with the US.”
ABP did not disclose expected returns, but said investments must generate returns appropriate to their risk profile.
Van Wijnen also pointed to the diversification provided by investing through funds rather than directly in individual start-ups.
Venture capital also fits the pension fund’s long-term investment horizon, he said, allowing assets to be deployed as “patient capital” where appropriate long-term returns can be achieved.
FD Mediagroep, IPE’s parent company, also owns FD and other media brands
