Untapped Potential: German Pension Funds Missing Out on European Startup Success (Redstone)
Summary
- The cumulative enterprise value of European startups and scaleups has grown by approximately EUR 2,5 tn since 2012.p.2
- Pension funds represent about 27% of the LP base for US VC funds, compared to less than 1% for German VCs.p.2
- US pension funds hold an indirect share of around 10% in German startups, benefiting from EUR 4,7 bn of value creation.p.2
- German pension funds benefit from only about 0,2% of value creation in German unicorn startups, amounting to roughly EUR 94 m.p.2
- In 2022, total VC investment volume in Germany reached EUR 10,15bn across various startup sectors.p.3
Key insights
- Over the period 2013 to 2022, Venture Capital was on average the best performing alternative asset class.p.4
- The average return on VC funds between 1996 and 2021 stood at 19,1%, compared to 2,74% for ten-year German government bonds.p.9
- Pension funds make up 27% of all LPs in US venture capital funds.p.12
- Around 19% of all European VC financings were completed with the participation of at least one US investor.p.12
- US pension funds hold an indirect stake of ~12% in Flix Mobility, compared to only ~0,3% for German pension funds.p.13
- German and Austrian pension funds participate in the success of Planradar at ~0,2%, whereas US pension funds hold an ~8% indirect stake.p.14
- US pension funds hold an indirect stake of around EUR 4,7 bn out of the total EUR 47 bn value of German startups with a unicorn valuation.p.15
- German pension funds account for less than 1% of LPs in German VCs, yielding only EUR 94 m in indirect unicorn value ownership.p.16
Topics and entities
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