5/4/2009

Go-ahead for first Bavarian-European venture capital fund of funds providing euro 50 million

MUNICH   The first Bavarian-European venture capital fund of funds (Dachfonds) worth euro 50 million is being launched today under the patronage of Martin Zeil, Bavaria’s Minister of Economic Affairs. It is a cooperation project between the LfA Förderbank Bayern (LfA Bank for the Advancement of the Bavarian Economy) and the European Investment Fund (EIF), which will oversee the management of the so-called Dachfonds facility. “With the Dachfonds we are creating vital incentives to provide more venture capital for young technology-oriented companies in Bavaria. This means that as of now Bavaria will offer more opportunities for start-ups while simultaneously strengthening the venture capital landscape”, Zeil commented.

Private offerings for early-stage financing were still in short supply also in Bavaria. The ongoing financial crisis was currently further exacerbating this situation. “That is precisely why we are now improving the availability of venture capital for technology-oriented business start-ups, also beyond the scope of the cluster funds at Bayern Kapital. The new facility will further boost the strong dynamism already existing in the field of high-tech start-ups”, Zeil continued.

For the Dachfonds, the LfA Förderbank Bayern and the European Investment Fund will both commit euro 25 million. Any interested third-party investors can join the scheme on the same conditions. The investments are aimed at two segments of the venture capital market: in the case of the early-stage funds, the focus is on technology transfer, frequently involving public or private research institutions. The follow-on financing funds for high-tech companies in the early and growth-stage segment are aimed at follow-up investments.

The overriding goal of the new Dachfonds is to build up and actively support a diversified portfolio of commercially sustainable venture capital funds with an expected rate of return typical of the industry. This will optimally stimulate the venture capital market, technology transfer and the development of high-tech companies in Bavaria. The investment period of the Dachfonds runs over five years and the duration of the investment is 10 years.

The State of Bavaria and the LfA Förderbank Bayern are engaged in the venture capital financing of young, innovative high-tech companies through Bayern Kapital GmbH, an affiliated company in the LfA Group. Through the technology funds managed by Bayern Kapital, the State of Bavaria and the LfA have so far participated in around 180 companies with an investment volume of close on euro 140 million.

Source: Invest in Bavaria

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