Venture & growth capital in Europe – mapping pension funds’ attitudes

Across Europe, pension funds manage over €3tn in assets, yet only roughly 0.12% is allocated to venture and growth capital (VC). Meanwhile, VC investment in Europe totalled €15bn in 2023. These numbers together highlight two persistent questions: can allocation to VC be compatible with the fiduciary duties of pension funds? If so, why has the historical aggregated allocation of pension funds to this asset class been so modest?

To address these questions, Pensions for Purpose embarked on a journey to engage with pension funds across Europe (including the UK) and other industry members, such as asset managers, trustees, investment consultants, insurance companies, VC firms and VC associations. Our goal was to understand regional differences in approaches to venture, including sustainability considerations, the main constraints for further allocation and the investment case for pension funds that have chosen to allocate to this asset class. With recent industry initiatives aiming to channel institutional capital toward innovation (notably the Mansion House Accord in the UK and the Tibi Initiative in France), we wanted to identify the drivers and showcase diverse experiences across countries.