Exclusive Spotlight: 5 Questions With…Regina Hodits
For this edition we spoke to Regina Hodits, who was instrumental in co-initiating Germany’s Fund-of-Funds, the renowned Zukunftsfonds. In our exclusive interview, Regina shares her journey in overcoming challenges, aligning stakeholders and driving innovation through the Zukunftsfonds. She also offers invaluable advice for Austria as we work on our own initiative.
Regina Hodits is a distinguished fund manager and Managing Partner at Wellington Partners. In addition to her success in venture capital, she previously served as Chair of the Board of the German Private Equity and Venture Capital Association (BVK). During her tenure, she co-initiated Germany’s Fund-of-Funds, the Zukunftsfonds, also referred to as the „KfW Dachfonds.“
Regina, to your mind, what is the role of Private Equity and Venture Capital for companies, both startups and SMEs?
Venture Capital (VC) and Private Equity (PE) play a vital role in any economy by driving innovation, creating jobs, and fostering economic growth in both startups and SMEs.
VC/PE-backed companies are often significant job creators, leading to increased employment opportunities across various skill levels, from entry-level positions to highly specialized roles.
VC/PE investments also allow for the development and application of innovative technologies and business models, which can significantly enhance their competitiveness, boosting not only individual firms but also general economic outcomes.
Investments can foster the development of entire innovation ecosystems, attracting talent to these clusters. VC/PE funding often leads to increased competition within industries, potentially driving down prices, improving product quality, and offering consumers more choices.
Last but not least, successful VC and PE investments lead to significant returns for all shareholders. These exits generate wealth not only for investors but also for founders and employees through stock options and other compensation tools, which, in turn, can contribute to broader economic prosperity.
What were the key objectives behind the creation of the Zukunftsfonds, and how did you approach aligning stakeholders to bring the concept to life?
The key objective of promoting a German Fund-of-Funds (Dachfonds) was to provide much-needed private institutional capital for VC and Growth funds based in or investing in Germany. This, in turn, aimed to increase investment in highly innovative and fast-growing companies in Germany and beyond.
By pooling investments and diversifying risk, the aim was to attract investments from private sources, particularly institutional investors like insurance companies and pension funds. These investors struggle to invest directly in smaller and local funds, as they need to deploy large tickets—often equivalent to the entire fund volume of a smaller fund—and they lack the teams to manage a significant number of such relationships alongside their current business.
And—to cut a long story short—the concept worked. The first German Growth Fund, Wachstumsfonds Deutschland, was closed in 2024 with over €1 billion in commitments. This fund augmented the investment of the German federal government and KfW Capital with commitments from over 20 institutional investors, including major insurance companies, foundations and large family offices.
The concept of a public-private partnership for a Fund-of-Funds to support the local PE/VC industry was not new at the time we at the BVK started lobbying for it in 2015. Several other countries, like France and Denmark, had already established such structures, with Denmark in particular serving as a role model.
Early on, we were able to foster an exchange between the players on the government side in Germany and Denmark to get the ball rolling. In addition, the BVK, together with Roland Berger and the Internet Economy Foundation, published a study based on a comprehensive analysis of the state of our industry. This study clearly demonstrated that a Dachfonds was a necessity to ensure not only the viability of the VC and growth investor ecosystem in Germany but also the sustainability of the German innovation economy as a whole.
At the time, the BVK had managed to initiate an LP group led by Peter Hielscher, who represented the LPs on the BVK Board and who had also been the Head of Alternative Investments at Talanx, one of Germany’s largest insurers. This LP group opened the doors to discussions with several prominent institutional investors about the Dachfonds idea. This effort led to the involvement of the GDV (Gesamtverband der Deutschen Versicherungswirtschaft), which subsequently played an important role in structuring the fund.
Initial skepticism, concerns and differences over the structuring and implementation of such a fund from potential future LPs were overcome by the tireless work of representatives of the German federal government and especially the BMWK, the BMF and KfW. Several roundtables with high-ranking government representatives and C-level executives of institutional investors proved essential. Finding the best structure and operating model for the fund was a herculean task for all the aforementioned parties. Many more hands and minds contributed to this effort, including the German Start-Up Verband and the European Investment Fund (EIF).
What were the main challenges the BVK faced during the development and implementation of the Zukunftsfonds, and how were these addressed?
When we started lobbying for a Dachfonds, we received a lot of goodwill from the German government, and the concept even sparked the interest of several institutional investors.
But it soon became clear that ideas for such a fund—how to structure and manage it, and how to split returns—were quite divergent.
In addition, legal concerns about navigating EU law, particularly regarding state aid legislation, as well as local fiscal rulings, needed to be addressed.
At the BVK, we had the opportunity to provide input from our perspective on what would work for our industry and what we had seen working in other EU countries. We also ensured that we used our media channels to maintain positive momentum for such a worthwhile cause—even when things looked bleak at times.
How has this Fund-of-Funds influenced the venture capital and private equity landscape in Germany, particularly for startups and innovation-driven sectors?
The Wachstumsfonds has already made significant commitments to several funds, which will invest in businesses with strong German ties. These commitments will help enlarge fund sizes and, in turn, allow for more substantial investments, particularly in growth-stage companies, thereby strengthening their competitiveness and future growth.
It is too early to measure the output in numbers for the German Wachstumsfonds. However, looking at the Danish example: not only were they able to achieve very attractive returns of over 17% IRR on their initial growth fund, but they also managed to raise an even larger follow-on fund, where much less economic incentive was needed to get private investors to commit. Another example is France—BPI has become a powerhouse, investing over €1 billion annually in funds and leveraging those investments by a factor of more than 5x with private money.
Back to Germany, on the back of the first Wachstumsfonds, the WIN initiative—backed by the federal government, KfW, and several larger corporations, and also supported by the BVK—aims to further boost growth and innovation capital in Germany. One of its major goals for 2026 and beyond is a follow-on fund for the first „Wachstumsfonds Deutschland“.
Based on your experience, what advice would you give to Austria as it works on developing its own Fund-of-Funds initiative? Are there any specific pitfalls we should aim to avoid?
The Austrian Fund-of-Funds is key to fostering the Austrian venture capital and private equity industry. Over the last decade, Austria has developed a much more vibrant VC and PE market, fueled both by external funds investing in Austria and—this is a great achievement—by several funds founded and raised to significant size in Austria, such as Speedinvest, with several others like APEX, Fund-F and more on the rise.
Still, reaching a three-digit million figure for a fund in Austria remains a significant challenge—yet such fund sizes are necessary to compete on an international scale. Achieving a critical mass of funding would foster a more vibrant ecosystem and make Austria an even more attractive location for both businesses and investors.
Continuing to involve all decision-makers—from politicians to potential LPs and institutions capable of managing such a fund is crucial. If needed, provide incentives to encourage institutional investors to join the first fund.
It is also essential that the fund is managed by an independent and experienced management team. By rigorously vetting the private VC/PE funds it invests in, the Austrian Fund-of-Funds could assess and, over time, improve the overall quality of the investment landscape. This would allow it to serve as a bellwether investor, attracting more investors both domestically and from abroad.
And—first and foremost—stay committed! Now is the time to get the Austrian Fund-of-Funds off the ground.