Invest-NL, the Dutch sovereign wealth fund, has announced plans for a new fund to support start-ups and scale-ups in their growth phase. The fund, which proposes an initial investment of 200 million euros from Invest-NL, could eventually reach a size of 600 million to 1 billion euros. This was announced yesterday at startup event Level Up 2024 in Eindhoven.
Reducing risks
The fund is a so-called fund-in-fund. Besides Invest-NL, pension funds and other investors also play a role. Invest-NL wants to attract pension funds by offering guarantees to reduce some of the risks. These risks come from the uncertainty of returns when investing in young technology companies. This can deter pension funds. Investment companies and private parties can also participate. The fund focuses on companies in technology and sustainability.
Opportunity for pension funds
Rinke Zonneveld, CEO of Invest-NL, stressed that although the plans are still at an early stage, there is already willingness to invest. He suggested that Invest-NL itself put 200 million euros into the fund, divided between venture capital and risk coverage for pension funds. Zonneveld understands the reluctance of pension funds, given the volatility of investments in start-ups and scale-ups, but stressed that there is potential for returns.
For example, pension fund PME, through funds like Innovation Industries, has already invested 260 million euros in deep-tech companies, with an annual return of 15% since 2017. Pension fund ABP expressed its openness to investing in innovative Dutch companies as part of a broader public-private partnership.
According to Zonneveld, impact is becoming increasingly important alongside financial returns. Indeed, pension funds are increasingly looking at whether a company contributes to social goals such as energy transition.
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