Diversifying the Institutional Investor Base European VC has been transformed in the past decade and is, as a result, not only now performing well, but is also highly competitive on a forward-looking comparison against The poor historical performance of European VC relative to US VC and also to European Private Equity is no secret. both European Private Equity and US VC But European VC has been transformed in the past decade and is, as a result, not only now performing well, but is also highly competitive on a forward-looking comparison against both European Private Equity and US VC Horizon Pooled Return (Net) by Fund Index, June 2018 30.0 29.8% LEGEND ) 25.0% % ( n Europe Developed Venture Capital Index r 21.7% u t 20.3% e Europe Developed Private Equity Index R 20.0 t 17.2% 17.2% Ne Cambridge Associates US Venture Capital Index d 16.0% 15.6% 16.0% e 15.3% l 15.0% MSCI Europe Index o o P 12.5% n o z i r 10.3% 10.2% o 10.0 H 8.2% 8.4% 7.5% 6.8% 7.4% 6.2% 5.3% 4.0% 4.2% 2.4% 0.0 25-Year 20-Year 15-Year 10-Year 5-Year 3-Year 1-Year Note: Source: Cambridge As of June 30, 2018. Associates “ Pension funds now more interested in European venture because pension funds look for good returns, and European venture has Venture capital fund shown an uplift in returns over last years. However, there are some things holding others back from allocating to European VC. managers now span the Those include the fact that VC investments tend to have long and European continent. deep J-curves, which requires long-term capital that can handle illiquidity. Furthermore, a secondary market in European VC is under development but is still immature.” Christina Brinck Sixth Swedish National Pension Fund The European Investment Fund is, to nobody’s surprise, the single most frequent supporter of European venture capital funds, but there is a growing list of LPs that are consistently backing European fund managers. Investor name # of known fund commitments Investor name # of known fund commitments Top 15 most active LPs in tech-focused VC 1 European Investment Fund 179 Top 15 most active LPs in tech-focused VC 1 European Investment Fund 179 funds in Europe funds in Europe 2 Finnish Industry Investment 28 2 Finnish Industry Investment 28 3 CDC Entreprises 26 3 CDC Entreprises 26 4 British Business Bank 20 4 British Business Bank 20 5 AP-Fonden 6 18 6 Access Capital Partners 16 5 AP-Fonden 6 18 7 LGT Capital Partners 15 6 Access Capital Partners 16 8 CDC Group 12 7 LGT Capital Partners 15 9 Pantheon 12 8 CDC Group 12 10 European Regional Development Fund 11 11 Bpifrance 10 9 Pantheon 12 12 Enterprise Ireland 10 10 European Regional Development Fund 11 13 European Bank for Reconstruction and Development 10 11 Bpifrance 10 14 Industry Pension Insurance 10 12 Enterprise Ireland 10 15 ARKimedes Management 9 13 European Bank for Reconstruction and Development 10 14 Industry Pension Insurance 10 15 ARKimedes Management 9 122 In Partnership with & www.thestateofeuropeantech.com