“We are planning investments in 20 Swiss growth companies”

The Swisscanto Growth Fund has made the first investments in growth companies. This week the financing round of Swissto12 had been announced. Swisscanto is among the lead investors. Are further investments in the pipeline?

Nils Granath (NG): Yes. Having an attractive deal pipeline is the oxygen of our business. Hence, we are allocating a major part of our resources in this direction.

Then Switzerland has enough growth companies?

Claudia Petersen (CP): Absolutely. Sometimes there’s a discussion about whether there are enough promising companies for the new growth funds in Switzerland. After a year of work in the market, we can confirm absolutely that there are.

Will the fund invest exclusively in Switzerland?

NG: The majority of the investments will go to Switzerland – we expect 70% to 80%. The remainder will be invested in Scandinavia, Germany and the Benelux countries. We see ourselves as an active investor and want to have companies in the vicinity.

You have raised a good CHF 150 million for the fund. How many companies will benefit from its distribution?

NG: We are planning investments in 20 growth companies, mainly in ICT and Medtech – these are both broad fields.

A year ago, the fund made headlines because it managed to get pension funds on board. How did you do that?

NG: Good question. There was a lot of work behind it. Together with our colleagues from distribution and relationship management some of us visited two or three pension funds every day.

CP: There was certainly no magic recipe. Pension funds are very different. What certainly helped were the ZKB and Swisscanto brands, which created trust. In addition, we have come to the market with realistic returns expectations and have not promised the moon. And we have a good track record and pipeline with ZKB Startup Finance.

Have you also noticed in general a greater openness of the pension funds towards venture capital? Will more funds be able to attract them as investors?

CP: There is still a long way to go. In some cases, the larger pension funds have only recently begun to invest in private equity.

Where are the problems? Is there a lack of knowledge?

CP: Private equity is a special asset class. Many pension funds are geared to keeping investment costs low and optimising them on an ongoing basis. An expensive VC fund, which gives a return only after some time, fits in poorly with this culture, even though in the end it is more lucrative than the conservative investment vehicles favoured by pension funds.

Last question: the growth fund is domiciled in Switzerland and takes the form of a limited partnership for collective investment. Is that not much more difficult to set up than a Luxembourg fund?

NG: No, not at all. It was even faster than we thought it would be. After we submitted the application with all the documents, FINMA granted us the approval within two months.

Dr Claudia Petersen is Vice-Director Private Markets at ZKB


Nils Granath is Investment Director at Swisscanto Invest