Dutch metals industry schemes PMT and PME have each invested another €75m in the third fund of Innovation Industries, a Dutch venture capital investor focused on tech start-ups.

The two Dutch pension funds are the largest investors in Innovation Industries III, which has raised €200m so far. Innovation Industries hopes to raise another €100-200m for its new fund, which will invest the money in about 15 technology start-ups and scale-ups. These are usually firms that are trying to commercialise innovations incubated at universities.

PME and PMT were involved in the two earlier Innovation Industries Funds that were launched in 2015 and 2019. These funds have invested in some 25 firms that employ approximately 900 people.

PME executive board member Marcel Andringa commented: “Innovative start-ups and scale-ups are essential for the competitiveness of the Netherlands, the energy transition and for a circular net-zero economy. In order to make new technologies come to fruition availability and access to capital in all development stages of a company is very important. Moreover, these companies also fit with our sector.”

innovation industries

Smart Robotics is one of the investee companies of Innovation Industries

Longer duration

PME and PMT expect a “market return” from the investments, meaning it should be higher than returns from equity markets.

According to the two funds’ asset manager MN, the pension funds should expect about 2.5 times the amount they invested on sale.

The duration of the funds is supposed to be around 11 years, which is significantly longer than that of private equity funds.

None of the participations of the two earlier funds have yet been sold, and all the firms are still running, according to MN. Examples of companies in the portfolio include Smart Photonics, Nearfield Instruments and Onera.

At the launch of the previous Innovation Industries fund in 2019, Andringa said he hoped other pension funds would join PME and PMT by investing too. This did not materialise back then.

According to Victor van Wil, portfolio manager at MN, two additional pension funds are currently looking to invest in Innovation Industries III.

This article appeared originally in Pensioen Pro, IPE’s Dutch sister publication. It has been translated and adapted for IPE by Tjibbe Hoekstra.