Wachtumsfonds, the Growth Fund set up by the German government for venture capital investments, has raised €1bn in its final closing, backed by Allianz, BlackRock, Generali Deutschland and pension schemes for professionals (Versorgungswerke), among others, the Federal Ministry for Economic Affairs and Climate Action announced.
Over 20 institutional investors allocated capital to the fund, with the government and KfW Capital, the subsidiary of state-owned investment and development bank KfW, investing in German and European venture capital and venture debt funds, acting as anchor investors, it added.
Further investors for the final closing include Debeka, Gothaer Versicherung, HUK-Coburg insurance firm, RAG-Stiftung, Signal Iduna, Stuttgarter Lebensversicherung, Tecta Invest and Württembergische Lebensversicherung.
The Growth Fund, a pillar of the Future Fund (Zukunftsfonds), invests primarily in German and European venture capital funds, with a focus on later stage growth, and information and communication technology (ICT), life sciences and climate and food tech sectors.
The fund, administered by Universal Investment, consists of two investment vehicles meeting the risk preferences of individual investor groups. The General Insurance Association (GDV), and its member companies, have played a key role in designing the structure of the Growth Fund, according to the ministry.
The fund started investing after the first closing in mid-December last year in 16 venture capital funds with a volume of €265m deployed by mid-November this year, the ministry added.
The government is channelling €10bn in a start-up through the Zukunftsfonds, that is made of financing facilities including the GFF-EIF Growth Facility of the European Investment Fund (EIF) and KfW Capital, the Deep Tech & Climate Funds, for high-tech start-ups, and the Venture Tech Growth Financing facility, and the ERP/Future Fund Growth Facility.
Federal minister for economic affairs and climate action Robert Habeck said the €1bn target volume for the fund was achieved in a short period of time, and it has already started to invest, impacting the venture capital market.
Jörg Goschin, senior managing director at KfW Capital, said the investor picks venture capital funds in Europe through comprehensive due diligence, adding: “Many investors have invested for the first time in the asset class of European venture capital, which has demonstrated very good performance in the past years and whose returns even exceeded those of the US market.”
Sofia Harrschar, head of alternative investments and structuring at Universal Investment, said: “We are pleased to have succeeded jointly with KfW Capital in developing a customisable solution for the various groups of investors that has been well received despite the difficult market conditions of 2023.”
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