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The second Belgian Growth Fund (BGF II) is launching with a committed capital of 202 million euros. Like the previous 2019 fund of funds BGF I, this new ‘super fund for growth’ will invest in funds that finance promising Belgian companies and help them grow, including internationally. The goal is to raise 350 million euros. With 312 million euros of capital raised, BGF I already enabled 576 million euros of investments in 40 Belgian scale-ups and growth companies.

Five years after the launch of Belgium's first growth fund BGF I, the Federale Participatie- en Investeringsmaatschappij (SFPIM), BNP Paribas Fortis and Flemish investment company PMV announce the first closing of a second super fund: BGF II. Several parties already pledged 202 million euros in capital. BGF II is again a ‘fund of funds’ - it does not invest directly in companies but does so through specialised venture capital and growth funds that do invest directly in scale-ups and growth companies. BGF I managed to raise a total of EUR 312 million from institutional investors. Several of these investors are back at BGF II: at least AG Insurance, Ethias, MRBB and KU Leuven again committed capital (in addition to SFPIM, PMV and BNP Paribas Fortis).

Effective model

BGF I, launched in 2019, proved the effectiveness of the model for Belgian scale-ups and growth companies. In five years, through 19 Belgian and cross-border funds, it has already invested more than half a billion euros in 40 Belgian scale-ups and growth companies. The largest investments were in Apheon V and Smartfin Capital II, each for EUR 25 million. But the first ‘super fund for growth companies’ also put money into the growth funds of Fortino and Sofindev, among others, and into a health economics fund of EQT led by former VIB chief Rudy Dekeyser. The investee companies include Leuven-based video technology developer THEO Technologies (via Smartfin Capital II) which was acquired by US Dolby Laboratories in the summer, Liège-based growth company Ampacimon (via Junction Growth Investors) which sells monitoring software and sensors for electricity grids worldwide, Brussels-based public affairs firm Acumen (via M80 Capital II) and Brussels-based expense platform Mobilexpense (via Fortino Capital Growth PE I) which was recently sold to Visma.

Sound financial returns

The investment phase of BGF I has now been completed, and BGF Management is proud of the performance of the first fund of funds so far. ‘The EUR 576 million that BGF I funds have already invested in 40 Belgian scale-ups is 3.7 times the amount that BGF I has so far fully invested in those funds. Which is nice leverage for the Belgian scale-up ecosystem,’ knows Wouter Winnen, Head of fund investments at PMV. Koen Broothaerts, Investment Director at BNP Paribas Fortis: ‘Some of the 19 funds have already distributed capital gains from successful sales of scale-ups. That makes for a flying start for a fund of funds that just finished its investment phase. BGF I is therefore on track to meet its target return of at least 10%.’

Increased focus on sustainability

As with the first fund of funds, the aim of BGF II is to support the growth and internationalisation of promising Belgian scale-ups and growth companies by giving them access to venture capital, through the funds in which BGF II will invest. BGF II is careful to ensure that there is a ‘Belgian angle’ every time. ‘Belgium lags behind its neighbours when it comes to financing scale-ups and growth companies. When they need to raise 10 or 20 million euros, they are often forced to turn to foreign funds or to be taken over by foreign companies. The value creation as well as the jobs created by such growth companies then often go abroad as well,’ says BGF president Pierre Demaerel. Koen Van Loo, managing director of SFPIM: ‘BGF II retains the interesting feature of the first fund: certain investors can partially lend to SFPIM, making it easier for insurers and pension funds to diversify into venture capital despite the strict capital requirement rules they are subject to in this asset class. What is new, however, is that BGF II will pay more attention to sustainability when selecting funds.’ As a fund of funds, BGF II will comply with the provisions in Article 8 of the Sustainable Finance Disclosure Regulation (SFDR).