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Kasia Piasecki took the stage with Ian Conotty from British Business Bank and asked the question: How can pension capital participate in venture and growth without compromising its responsibility to beneficiaries?
The strongest points were:
- The risk of not investing. Avoiding venture does not mean avoiding risk. Europe risks missing the technologies driving future returns and economic growth. Meanwhile, public-market portfolios themselves can be highly concentrated — the panel pointed out that roughly 20% of MSCI was concentrated in five companies, themselves originally venture-backed.
- Venture doesn't mean pension funds picking startups. This came through repeatedly. For most pension funds, particularly small and medium-sized ones, direct startup investment makes little sense. The solution is diversified exposure through experienced managers, funds of funds or other vehicles containing hundreds of underlying companies.
- Portfolio construction changes the risk equation. Individual startups can absolutely fail. But that's the wrong unit of analysis for a pension fund. The relevant question is what happens across a diversified portfolio and how that allocation behaves within the pension fund's overall portfolio.
- Size is a practical problem. Large pension funds need to deploy very large tickets. Many individual European VC funds are simply too small to be investable for them. Aggregation vehicles therefore matter.
- Government can catalyse private pension capital. The British Business Bank was presented as an important example: public capital can anchor vehicles, provide credibility and reduce the perceived leap into a relatively unfamiliar asset class. But government support shouldn't substitute for investment performance — ultimately the economics must stand on their own.
- There is a missing European LP layer. Europe doesn't have the huge endowment and foundation LP base that exists in the US. National and European institutions therefore have an important role in helping create that institutional LP ecosystem.
- This is about European competitiveness, not simply VC fundraising. One of the strongest parts of the discussion was what happens when European companies cannot find sufficient growth capital here: US capital enters, companies are acquired or eventually shift their centre of gravity, and Europe loses future jobs, IP, manufacturing and economic value.