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Since early 2010, ABP (the largest pension provider in The Netherlands with a total capital of €372 Billion) has invested €200 Million in startups through venture capital fund INKEF Capital. Yesterday, they announced to expand their investment to €500 million, making ABP the biggest investor in the Dutch startup industry today.
Low interest, high returns
It’s no wonder pension funds and insurers love startups. The interest is low and the returns are often higher than your typical investments or debentures, which means higher and more stable pensions. More importantly, the investments also help to further develop and stimulate the Dutch knowledge-based economy, and the business climate in general.
But every investment comes with a risk – it’s no wonder people are skeptical of valuable pension funds being invested in risk capital. The ABP however claims that risk is only involved if the whole investment portfolio were to be invested, which is not the case. The investment portfolio is diverse, with a balanced spread on the risk/turn profile. More about that here, when we wrote about INKED and ABP earlier this year.
Assistance and advice
INKEF Capital typically invests in tech startups that are operating in the healthcare, IT, new media and Fintech industry. Next to cold hard cash, they also offer intensive assistance and advice – a different and more intense method than your typical investment company.
“For the ABP it is important that investments in The Netherlands stimulate job growth and economic development, next to the return on investment,” says Corien Wortmann-Kool, chairman of the ABP. “In the past INKEF proved that they are able to find the perfect startups to invest pension funds in. That is why we have decided to expand the investment with 300 million euros.”
Benefiting tomorrow’s economy
ABP’s expansion of its investment in INKEF is exactly the kind of boost that the Startup Delta initiative is trying to achieve. HRH Prince Constantijn of The Netherlands, Special Envoy for StartupDelta, encourages other institutional investors to follow ABP’s example:
“StartupDelta‘s mission is to improve the Dutch ecosystem for startups and scale-ups by removing barriers and increasing access to talent, capital, networks, knowledge and markets. Institutional investors with their long-term funding can play an important role in strengthening the Dutch ecosystem. This will create jobs and benefit tomorrow’s economy. These jobs will be necessary in order to pay for pensions in the future”.