Mobilizing Europe’s Pension Power: Fueling Innovation and Growth Through Venture Capital – 0100 Weekly Brief
This week in 0100 Weekly Brief, we’re highlighting EWVC’s latest report, “Venture & Growth Capital in Europe: Mapping Pension Funds’ Attitudes,” the first comprehensive, Europe-wide analysis of how pension funds could unlock innovation, growth, and strategic sovereignty across the continent.
Why does this matter? It matters because Europe’s venture capital market is constrained by a chronic lack of capital.
Despite managing over €3 trillion in assets, European pension funds allocate only 0.12% to venture capital — compared with roughly 10% in the US.
This minimal exposure leaves European startups short of the patient capital needed to scale innovation and compete globally. As Kerstin Jorna, Director-General for Internal Market, Industry, Entrepreneurship and SMEs at the European Commission, notes in the report, a “lack of knowledge and expertise” remains one of the key barriers preventing pension funds from investing more actively in equity markets.
Are Pension Funds The Missing Piece?
The lack of participation has hindered Europe’s VC ecosystem, despite initiatives such as the UK’s Mansion House Accord, Italy’s legal reforms, and France’s Tibi II plan aiming to change that. The UK’s new Mansion House Accord shows how governments are starting to take action to unlock more pension fund capital for private markets.
Additionally, there are lots of voices raised in this sector that advocate for more involvement from local pension funds. The UK government minister has recently called for pension funds to invest more in the country’s growing science and technology sectors. Lord Patrick Vallance, the science and technology minister, said that too many cutting-edge UK companies in areas like AI, biotechnology, and quantum tech are being overlooked by domestic investors.
The leading financial think-tank, New Financial, also recommended that the UK government require workplace pension funds to invest more in British companies. The group proposed that pensions should allocate 20–25% of their equity holdings to UK stocks, up from the current level of less than 9%.
This change could inject over £75 billion into the UK stock market by the end of the decade. And a stronger domestic investment would help rebuild the UK’s public equity markets, which have weakened as pension funds moved money overseas.
A New Source of “Patient Capital”
Europe has a problem, not only with the allocation of more capital from pension funds to venture, but also with its own retirement system. According to a recent report by The European Capital Markets Institute, Europe’s retirement system is falling behind.
Most EU countries try to encourage saving through tax breaks, but these mostly help higher earners and do little for younger or lower-income workers. The report suggests that automatic enrolment in workplace pensions would make saving easier and fairer for everyone. It also calls for simpler, more flexible pension plans that fit people’s real lives. So, saving for retirement feels less complicated and more achievable.
This kind of reform could also help Europe’s venture capital market. As more people join workplace pensions and contributions grow, pension funds will control much larger pools of long-term money. If even a small part of that is invested in venture capital, it could give European startups the steady funding they need to grow and compete globally.
How We Can Bridge The Gap
According to the recent report by European Women in VC, pension funds across Europe are beginning to show more interest in venture capital, marking a slow but promising shift in how retirement money supports innovation.
Pension funds now recognize that while VC carries higher risk, it can also deliver double-digit returns—often higher than traditional PE investments.
Return expectations are one of the biggest motivators.
Most funds are leaning toward later-stage opportunities, where companies have proven business models and more predictable outcomes.
In countries like Latvia and the Netherlands, pension managers are favoring growth and buyout funds over early-stage ventures, while others, such as in the Baltics, are starting to explore earlier stages thanks to strong local ecosystems.
Access routes also matter.
Many pension funds prefer investing through single venture funds managed by experienced fund managers rather than co-investing or making direct deals, which are seen as riskier and more complex.
Fund-of-funds (FoF) structures are also gaining traction as they allow investors to diversify risk across multiple funds, lowering the potential for major losses while maintaining attractive returns.
A recent example is Apire11’s inaugural €500 million pension-backed fund, led by Pavel Mucha and Tulin Tokatli, which aims to connect long-term pension capital with private markets and venture capital. Its mission is clear: to back generational companies and bring stronger returns home to European pensions.
“Pensions can engage at different levels of risk — from highly diversified fund-of-funds at the lower end, to growth and direct venture strategies for those ready to go further. With the right frameworks, venture is not just an ‘alternative,’ but a source of diversification, resilient returns, and long-term impact”,
says Kinga Stanislawska, Founder, European Women in VC.
Industry leaders have also outlined four main ways forward on how pension funds and VCs can understand and help each other better:
Creating more tailored investment products for pension schemes
Increasing education around VC’s real risk and return profile
Fostering open communication between VCs and pension trustees
Shifting the focus from cost to long-term value
Deep Dive into Pension Funds at 0100 International
Learn first-hand about EWVC’s latest report in Milan
Don’t miss the keynote “Mapping Pension Funds’ Attitudes to Venture & Growth in Europe” presented by Kasia Piasecki.
Kasia is Managing Director of European Women in VC, the largest community of female venture capital and growth investors across Europe, and a partner at Bootstrap 4F, a female-focused fund of funds.
🌍 Across the Ecosystem | News & Useful Resources for You
We’re not the only ones thinking about the role of pension funds in shaping Europe’s investment future. With new reforms underway, governments pushing for stronger private market participation, and investors calling for better long-term returns, the conversation around how pension capital supports innovation is gaining momentum across Europe and beyond.
Here’s a spotlight on the ideas and initiatives driving this, from policy changes to new fund models and cross-border efforts, all focused on turning pension savings into powerful fuel for venture growth and long-term economic resilience.
🗞️ News | Pension fund Rentea backs €500m fund to invest in VC and startups — and hopes others will follow its lead
A new Prague-based investment firm, Aspire11, has raised a €500 million fund backed entirely by Czech pension company Rentea and its parent group, The Partners Group. The fund will invest in both venture capital funds and growth-stage European companies, with the goal of showing that pension money can successfully back innovation.
Founder Pavel Mucha, who previously launched VC firm Kaya, says the goal is to “wake up sleeping capital” and inspire other pension funds to follow suit. About a quarter of Aspire11’s capital will go into other VC funds, while the rest will be used to support around a dozen growth companies over the next five years.
🔎 Analysis | Europe’s pension problem is constraining VC ambitions
Europe’s venture capital (VC) market is still struggling to find its footing, and many experts point to one major issue: the lack of pension fund participation.
While US pension funds allocate around 10% of their assets to private equity and VC, Europe’s share sits at just 0.12%, despite managing more than €3 trillion in total assets. This funding gap has made it harder for European startups to access the long-term, patient capital they need to grow.
📄 News | Norwegian pension funds consider increasing PE investments
Norwegian pension funds are considering expanding their investments in private equity (PE), as discussions grow about how unlisted assets could play a bigger role in long-term pension strategies. While several Norwegian life insurance companies already include PE in their portfolios, the broader pension industry is now exploring ways to increase exposure
If more Norwegian funds decide to allocate to PE, it could bring new momentum to the region’s private market ecosystem — offering local startups and scaleups access to more institutional capital while giving pension funds new tools to deliver sustainable growth for their members.