BGF starts with initial amount of EUR 213 million
Initiator the Federal Participation and Investment Company (FPIM) and the service providers PMV, the Flemish investment company, and BNP Paribas Fortis Private Equity are particularly pleased that 213 million was raised quickly at the first closing.
Inspired by a similarly successful model in Denmark, the Belgian Growth fund (BGF) will support funds that invest in promising Belgian companies and help them grow, including internationally. Belgian Growth Fund raised funds from institutional investors such as insurance companies, banks and pension funds, and from family offices. This amount will continue to grow in subsequent closings.
Strengthening growth companies
Belgian Growth Fund wants to strengthen the financial strength of Belgian growth companies with larger investment tickets. In this way, these companies, which guarantee a high level of innovation and extra employment, can stay in Belgium, be managed from here and develop internationally. Hence, the first closing of Belgian Growth fund is excellent news for the Belgian economy and the strengthening of the economic fabric in the country. “An important part of our future jobs is created by growth companies. This is one of the advantages of scale-ups: the number of new employees is greater than that of start-ups. Furthermore, larger companies offer more variety of jobs at various levels, which broadens their impact on wealth creation", says Minister Alexander De Croo.
"In a first round of financing, promising start-ups usually find sufficient resources in our country in recent years, but for scale-ups it is already much more difficult to find the necessary growth financing. Raising amounts of 10 million euros and more is often a problem for Belgian companies, because there are few venture capital funds in our country that can put such amounts on the table. For Belgian growth companies, this usually means a semi-obligatory choice, either to sell early to international companies or to opt for foreign investors without any Belgium link, with the risk that these scale-ups will not be developed further from Belgium", says Jan Alexander, head of fund investments at PMV.
Fund on track
This new fund does not invest directly in growth companies, but through funds that in turn invest in growth companies. In this way, a very diversified portfolio is built up that appeals to a wide range of investors from a diversification perspective. With an initial closing of 213 million euros, the fund is on course: from the outset, it was aiming for a size of 300 to 400 million euros. In the coming months, this fund will raise additional resources from investors. The first fund investments of Belgian Growth Fund are planned for the next few months. "As a manager with an extensive national and international network, BNP Paribas Fortis is pleased to select the funds that will contribute to the success of Belgian Growth Fund. We have many years of expertise in direct private equity and fund investments in particular", says Max Jadot, CEO of BNP Paribas Fortis.
BGF raised the institutional investment funds from AG Insurance, Belfius Insurance, BNP Paribas Fortis, Crelan, Ethias, FPIM, KBC Insurance, KU Leuven, PMV and VDK Spaarbank. "The investment in Belgian Growth fund fits in perfectly with AG Insurance's investment strategy to invest more in the real economy. We have supported this initiative from the outset, on the one hand because of its innovative financing structure, and on the other hand because of the quality and expertise of our partners FPIM, PMV and BNP Paribas Fortis Private Equity", says Hans De Cuyper, CEO of AG Insurance.
End of the financing chain
Koen Van Loo, Managing Director of FPIM: "We are delighted that we have been able to mobilise private institutional capital for Belgian Growth Fund. This allows us to take larger investment tickets in funds. Especially insurers can, due to the strict investment rules to which they are subject, not or hardly invest in venture capital. By also allowing the government to participate in the fund, and by developing a concept whereby FPIM partly borrows from such investors, we were able to convince them - in addition to the diversification argument - to invest in this asset class. Belgian Growth Fund is the logical conclusion of the Belgian financing chain. From now on, we will be able to allow promising Belgian companies to really grow internationally while anchoring them locally".