The VC fund of funds “Wachstumsfonds Deutschland” (Growth Fund Germany) has reached its EUR 1 billion target volume.
A key building block of the Future Fund of the German Federal Government has thus been completed. The Wachstumsfonds Deutschland one of the largest VC funds of funds ever to be set up in Europe.
It is funded primarily by private resources. Besides the Federal Government and KfW Capital as anchor investors, the fund has more than 20 major institutional investors including insurers, superannuation funds, foundations, asset managers and large family offices such as Allianz, BlackRock, Debeka, Generali Deutschland AG, Gothaer Versicherung, HUK-Coburg, the RAG-Stiftung, SIGNAL IDUNA, Stuttgarter Lebensversicherung a.G., Tecta, and Württembergische Lebensversicherung AG.
Together with other investors, the Wachstumsfonds invests in German and international VC funds with a focus on Europe and Germany. This will significantly improve access to urgently needed growth capital for start-ups and innovative technology firms while strengthening Europe and Germany as an innovation location. KfW Capital acts as both an investment intermediary and an investment advisor for the Wachstumsfonds Deutschland. The fund will be managed by the fund service platform Universal Investment Group.
What is special about the structure of the Wachstumsfonds Deutschland is that it is composed of two parallel investment vehicles, consider the different risk preferences of the individual groups of investors. The German Insurance Association (GDV) and its members played an important role in accompanying the structuring of the Wachstumsfonds.
Stefan Wintels, Chief Executive Officer of KfW Group and Chair of the Supervisory Board of KfW Capital:
“By launching the ‘Wachstumsfonds Deutschland’ we have succeeded in setting up a marketable structure for mobilising private capital. This fund is a great example showing how the public sector and private investors can jointly bolster the VC ecosystem in Germany and Europe.”
The fund invests primarily in German and European VC funds with a focus on the later stage segment. The sectoral focus is on information and communication technology (ICT), life sciences as well as climate and food tech. As is customary, the Growth Fund Germany began its investment activity already after the first closing, which was in mid-December 2022. By mid-November 2023, it had already invested in 16 VC funds with a volume of more than EUR 260 million.
KfW Capital is the coordinator of the “Future Fund” (“Investment Fund for Technologies of the Future”). Under this fund, EUR 10 billion will be available for the quantitative expansion and qualitative enhancement of existing financing offers and the development of new instruments until 2030.
In addition, the ERP Special Fund is participating financially in multiple instruments of the Future Fund. Together with further private and public partners, the Future Fund aims to strengthen the VC ecosystem with its various modules on a sustainable basis.
KfW Capital is coordinating the individual building blocks of the Future Fund jointly with the Federal Ministry for Economic Affairs and Climate Action and the Federal Ministry of Finance as well as KfW, the European Investment Fund, the High-tech Start-up Fund (HTGF) and the Deep Tech and Climate Fund (DTCF). The Future Fund is currently composed of eight building blocks.
Featured image credit: Edited from freepik
