Wachtumsfonds, the Growth Fund established by the German government, has successfully raised €1 billion in its final closing. This achievement, announced by the Federal Ministry for Economic Affairs and Climate Action, is backed by major investors including Allianz, BlackRock, and Generali Deutschland. The fund also garnered support from professional pension schemes, known as Versorgungswerke.
The Growth Fund, a central component of the Future Fund (Zukunftsfonds), primarily targets investments in German and European venture capital funds. Its focus areas include later stage growth and sectors like ICT, life sciences, climate, and food tech. Managed by Universal Investment, the fund consists of two investment vehicles catering to different investor risk preferences.
Influential backers and investment strategy
Over 20 institutional investors allocated capital to the fund. The government and KfW Capital, a subsidiary of the state-owned KfW, served as anchor investors. They were joined by entities such as Debeka, Gothaer Versicherung, and HUK-Coburg insurance firm for the final closing. Other key investors included RAG-Stiftung, Signal Iduna, Stuttgarter Lebensversicherung, Tecta Invest, and Württembergische Lebensversicherung.
The General Insurance Association (GDV) and its member companies significantly influenced the Growth Fund’s structure. Their involvement underscores the fund’s strategic importance in the venture capital landscape.
Funding and investment milestones
Since its initial investment phase starting mid-December last year, the fund has deployed €265 million into 16 venture capital funds by mid-November this year. This rapid deployment reflects the fund’s aggressive investment strategy.
The German government is channeling €10 billion into startups through the Zukunftsfonds. This includes various financing facilities like the GFF-EIF Growth Facility of the European Investment Fund (EIF) and KfW Capital, the Deep Tech & Climate Funds, and the Venture Tech Growth Financing facility.
Official statements and investor insights
Federal Minister Robert Habeck highlighted the fund’s swift achievement of its €1 billion target volume and its immediate impact on the venture capital market. Jörg Goschin, Senior Managing Director at KfW Capital, noted the careful selection of European venture capital funds through comprehensive due diligence. He emphasized the exceptional performance of European venture capital, which has recently surpassed returns in the US market.
Sofia Harrschar, Head of Alternative Investments and Structuring at Universal Investment, expressed satisfaction with the fund’s success. She credited the joint efforts with KfW Capital for developing a customizable solution well-received by various investor groups, even amidst the challenging market conditions of 2023. Harrschar’s statement underscores the resilience and adaptability of the fund in a fluctuating economic landscape.
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