E500m for German venture FoFs

ERP-EIF Dachfonds, a €500m venture fund-of-funds, has been launched to invest in German high tech venture capital funds. EIF will be managing the investments on behalf of the German Federal Ministry of Economics and Labour (BMWA) and ERP, the European Recovery Programme.

Support of the high tech sector is one of the top priorities for the German government. BMWA has committed €250m to the venture from ERP resources and this has been matched by an EIF co-investment. Matthias Ummenhofer, head of the ERP-EIF Dachfonds team, said: “The Dachfonds will take participations of at least 10% when investing in a venture capital fund, but the average participation in a fund will depend on market conditions. The aim is to maximize the mobilization of private capital to fully use the leverage effect of the ERP-EIF Dachfonds.”

The main aim of the fund is to support the establishment and financing of specialised venture capital funds that focus on investments in early and development stage technology companies in Germany. The second focus is to provide finance for funds that ensure follow-on financing for these companies. The funds benefiting from the new initiative are not restricted to invest solely in German companies although the main geographical focus of the investments should be in Germany.

State secretary of BMWA, Dr Alfred Tacke, as well as vice president of the European Investment Bank, Wolfgang Roth, attended the launch of the Dachfonds. Also present were Dr Holger Frommann, managing director of the German venture capital association, the BVK, and Thomas Pütter, vice chairman of the BVK.

Roth spoke of the necessity for involvement of public sector money in the early stage segment. “This new fund should not be considered as a subsidy vehicle, but as a professionally and commercially managed instrument.”