ABP invests €1 billion in European tech companies

ABP, the Netherlands’ largest pension fund, with assets of € 568 billion, will invest € 1 billion in fast-growing European technology companies over the next three years. The first step is a € 250 million contribution to the Scaleup Europe Fund, which targets strategic sectors such as artificial intelligence, quantum technology, and medical technology. With a target size of € 5 billion, the fund aims to keep European innovation and jobs in the region by providing growth capital to companies that would otherwise move abroad.

European strategy to stem the outflow of innovation

The Scaleup Europe Fund is an initiative of the European Commission and a group of institutional investors, including ABP. The fund fills a crucial gap in the European financing market: late-stage capital for technology companies that need € 100 million or more for international expansion. EQT, a Swedish asset manager, has been selected as fund manager and will make investment decisions independently. The fund targets sectors essential to Europe’s future competitiveness, such as AI, quantum technology, energy, space, and medical technology. Prince Constantijn, special envoy at Techleap, hopes more institutional investors will follow suit to support the growth of European tech companies.

ABP’s strategy: diversifying risk and generating returns

ABP’s investment is part of a broader strategy to diversify risk. The pension fund previously reduced its investments in US government bonds and technology companies to limit currency risk. Board chair Harmen van Wijnen stresses that the investment aligns with ABP’s responsibility to provide its members with a good pension while pursuing return opportunities from innovative companies. The €250 million represents approximately 0.04% of ABP’s total portfolio, underscoring the limited exposure. ABP plans to invest € 1 billion over the next three years, depending on market conditions and available opportunities.

Wennink’s call: four key sectors for future prosperity

ABP’s investment aligns with the recommendations of Peter Wennink, former CEO of ASML. In his report, The Road to Future Prosperity, he identifies four key sectors for Europe’s future: digitalisation and AI, security and resilience, energy and climate technology, and life sciences and biotechnology. These sectors largely overlap with the Scaleup Europe Fund's focus. Wennink warns that Europe is losing ground to the US and China in critical technologies such as AI, semiconductors, and biotechnology. He calls for targeted investment and reforms to stimulate economic growth and safeguard the prosperity of future generations.

European autonomy and economic impact

ABP’s investment and the Scaleup Europe Fund represent a concrete step towards strengthening European technological autonomy. For years, Europe has seen innovation and talent flow to the US and Asia because of a lack of growth capital. The fund aims to reverse this trend by helping European companies scale within the region. According to the EU Startup and Scaleup Strategy, the goal is to make Europe the best place in the world to build and grow technology companies. The strategy comprises 26 actions, including simplified regulations, better access to financing, and faster market entry. ABP’s investment contributes to these goals by making capital available to companies that would otherwise move abroad.