A year after the final closing: Growth Fund Germany - lower valuation levels are benefiting portfolio formation

• More than half the volume of the Growth Fund Germany has already been committed to 29 target funds
• Focus is on information and communication technology (ICT) and life sciences
• Sustainably strengthening the German and European venture capital ecosystem

Around one year after its final closing, the ‘Growth Fund Germany’ (Growth Fund) has already committed more than half its target volume, EUR 567 million, to 29 venture capital (VC) funds (as at 30 November 2024). The fund of funds is a key building block of the Future Fund of the German Federal Government and, with a fund volume of just over a EUR 1 billion, is one of the largest VC funds of funds ever launched in Europe.

The Growth Fund receives just under 70% of its funding from private capital. Among the investors are more than 20 major institutional investors, including insurers, foundations, superannuation funds, asset managers and large family offices. The Federal Government and KfW Capital are anchor investors. The Growth Fund invests in German and international VC funds that have a focus on Europe and Germany. The main areas of investment are ICT and life sciences with 40% and 36%, respectively. Deep tech, industrial tech, climate tech and food tech account for the remaining 24%. More than 85% of the funds in the portfolio of the Growth Fund Germany are classified as Article 8 and Article 9 in accordance with der EU Sustainable Finance Disclosure Regulation (SFDR). With its activities, the Growth Fund improves access to growth capital for start-ups and innovative technology firms and strengthens Europe’s position as a location for investment and innovation. KfW Capital acts as both an investment intermediary and an investment advisor for the Growth Fund Germany. The Growth Fund Germany is managed by the fund service platform Universal Investment Group.

Dr Jörg Goschin, Senior Managing Director of KfW Capital:

“The Growth Fund Germany is an excellent example of the intelligent interplay of private and public capital. As its investment adviser, we have already been able use our selective risk/return-oriented approach to build up a well-diversified portfolio that benefits in a particular way from significantly reduced entry valuations following the market correction in 2022. And we see further attractive investment opportunities for our target funds for the two remaining years of the four-year investment period.”

Jochen Meyers, Group Head of Relationship Management at Universal Investment Group:

“In partnership with KfW Capital, we have created a solution that makes venture capital as an innovative asset class accessible for a range of investor groups. We are pleased to contribute to strengthening Germany’s position as a location for innovation and to accompany the success of our client KfW Capital.”

KfW Capital is currently working on the design of a second fund generation. Fundraising for it is scheduled to commence in early 2026. The Future Fund has already made EUR 200 million available (see EUR 1.75 billion for the VC ecosystem | Capital.) KfW Capital, too, is planning an investment of its own for the new fund generation on the level of the Growth Fund Germany (EUR ~ 100 million).

Note:

You can find a selection of VC funds from the portfolio of the ‘Growth Fund Germany’ at: Portfolio | Capital. There you can also read more about the Growth Fund I investors.