The new Dutch state-run investment fund Invest-NL has committed €10m to the Innovations Industries II fund, a €184m private equity vehicle that was jointly set up by the Dutch metal industry schemes PMT and PME in 2019.
When Invest-NL was founded in 2019, pension funds were fearful the state-run scheme – which is led by former finance minister Wouter Bos – was going to compete directly with them in providing capital to private market investments.
MN, the asset manager jointly owned by PMT and PME, told trade publication Pensioen Pro at the time that the new state fund could have lower return requirements and would therefore be able to offer cheaper funding conditions than other pension funds.
Invest-NL’s mission is to invest in sustainable projects that benefit society, with an emphasis on energy transition.
However, now that Invest-NL has finally made its first investment, worries about unfair competition seem to have abided. “It’s good Invest-NL is involved with a fund that offers risk-bearing capital to high-tech firms in the Netherlands,” said Victor van Will, senior consultant investment solutions at MN.
“They take part as a regular market participant so they are not exerting downward pressure on returns,” he added. “Besides, demand for risk-bearing capital remains high. If a new fund were to be set up next to Innovation Industries, there will be enough companies left to finance.”
In 2019, PMT and PME were founding partners of the second fund of Dutch private equity investor Innovation Industries. Both pension funds committed €75m, enough capital to set up the fund.
“For the metal sector schemes, this was a nice opportunity to invest in their own sectors. The fund focuses on firms that commercialise technologies developed by the three technical universities in the Netherlands as well as TNO Institute,” said Van Will. The fund will keep all its investments for a period of at least seven years.
Innovation Industries currently owns 25 companies. A example of this is Nearfields Instruments. This Rotterdam-based firm develops technology that’s used in the production process of semiconductors. The company’s first equipment has already been sold to a South-Korean firm.