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Where are they?
A fund of funds for Austria
Capital for innovation and growth
The fund of funds is an invest.austria initiative aimed at improving access to capital for Austrian companies. It pools resources from institutional investors such as pension funds, insurance companies, and banks and invests in venture capital and private equity funds. These funds support startups and SMEs, strengthen Austria as a business location, and counteract the exodus of innovative companies.
WHERE ARE WE?
Idea
Fund-of-funds Vision 2030
Government Agenda
start
Facts & Figures
- 1.2%
GDP in Austria shrank by 1.2% in 2024, WIFO
-2.5%
GDP per capita in Austria in 2024, compared to 2019
17%
Denmark's first fund of funds achieved returns
0.3%
expected further decline in economic output by 0.3% in 2025, WIFO
-17%
The total volume of startup investments in Austria fell by 17% in 2024, from 695 million euros to 578 million euros.
€85 billion
Euro is the economic added value that startups can bring to Austria, Mc Kinsey
206,000
Austrian startups can generate jobs, according to a study by Mc Kinsey
79%
79% of Austrian startups plan to expand and hire their teams in 2025. Austrian Startup Monitor 2024
Questions about the fund of funds
Funds of funds are investment funds that invest investors' money in shares of investment funds. The funds in which the fund of funds invests are called target funds. A fund of funds does not invest directly in companies.
An umbrella fund established in Austria that provides capital to investment funds with an Austrian focus. This will enable, among other things, more investments in Austrian startups, SMEs, scale-ups, and spin-offs.
The aim is to mobilise national and international venture capital in order to, among other things, improve financing opportunities for start-ups and SMEs in Austria and promote their growth.
On February 27, 2025, the Austrian government announced that the fund of funds had been included in the new government program. invest.austria, the representative of investors in Austria, initiated the concept of a fund of funds several years ago. Since then, the association has been actively supporting its implementation and providing advice.
Since the official inclusion of the fund of funds in the government program, invest.austria has been heavily involved in its implementation, in close coordination with the Federal Ministry for Economic Affairs and Energy. As the central point of contact, invest.austria contributes its expertise, advises political decision-makers, supports them with know-how transfer and networking, and also provides operational support for the process. With over 350 members, including leading angel investors, venture capital firms, and private equity firms, the association is an indispensable voice in the implementation of the concept.The fund of funds collects capital from investors and invests this money in other funds (VC funds), which then invest directly in startups and SMEs.
The fund of funds is primarily suitable for institutional investors such as pension funds, insurance companies, and banks. However, the fund of funds is also intended to appeal to larger private investors, such as foundations and family offices.
The exact structure of the Austrian fund of funds is currently being finalized, but the basic concept envisages a "fund of funds."
This structure brings significant advantages:First, it enables diversification: by investing in several VC funds, the overall risk of the fund of funds is spread.
Second, the fund of funds benefits from the expertise of the fund managers of the individual VC funds. These managers often have specialized knowledge in specific industries or company stages, which increases the likelihood of successful investments.
Third, the structure ensures efficiency: By not having to invest directly in individual startups, the fund avoids bureaucratic hurdles and the risk of potential wrong decisions that could arise from a lack of expertise.
Such fund-of-fund models are not new in Europe. The German Zukunftsfonds (Future Fund) and the Danish Vaekstfonden (Fund of Funds) are good examples. Both aim to mobilize venture capital for startups and innovative companies, thereby promoting economic growth in their respective countries.
These European examples show that a well-structured fund of funds can be an effective tool to strengthen the ecosystem for young, high-growth companies.Key arguments for a fund of funds in Austria are:
Growth-stage financing gap: In Austria, there is a significant gap in the availability of venture capital (VC) and private equity (PE) financing, especially for growth-stage companies. While early-stage financing works relatively well in Austria, startups and SMEs often struggle to find the capital to scale their business model.
Brain drain: Many of Austria's most promising and innovative startups are forced to seek financing abroad. This results in the country losing not only capital but also innovation, jobs, and potential GDP growth.
Mobilizing domestic capital: Austria has sufficient capital, but it is often not invested domestically. The fund of funds is intended to help mobilize this capital and direct it toward the domestic innovation hub.
Strengthening Austria as a location for innovation and business: The fund of funds aims to strengthen Austria as a location for innovation and business. By improving financing for growth companies, the country's competitiveness is to be increased and contribute to the creation of new jobs and economic growth in the long term.
Current challenges: In the current economic climate of high inflation, rising interest rates, and a slowing economy, startups and SMEs are finding it particularly difficult to raise capital. The fund of funds is intended to improve financing options in this environment.
In summary, the fund of funds is an important measure to address the structural weaknesses in the Austrian financing ecosystem for startups and SMEs, stimulate economic growth and prevent innovative companies from moving abroad.
By including the fund of funds in its government program, the government has committed itself to implementing it and creating the necessary legal and regulatory framework for it.
The future role of the state in establishing the fund of funds is currently being discussed, and there are various ideas as to how it could contribute.
Seed funding: The government could provide initial funding to launch the fund of funds and act as a catalyst. This would help gain the trust of other investors and provide the fund with a solid foundation.
Risk-sharing through guarantees: One option would be for the government to provide guarantees for a portion of the investments. This would reduce the risk for private investors, which could particularly attract risk-averse investors such as pension funds and foundations.
It is important to emphasize that the specific form and extent of government involvement have not yet been finalized and will depend on political decisions.
The fund of funds is agreed in the coalition agreement of the current government and the government has set itself the goal of creating the necessary legal and regulatory framework for it.
The precise “operational” role of the state in establishing the fund of funds is currently being evaluated, with three key points currently being identified:Provision of “infrastructure”: The state installs and operates the management vehicle of the fund of funds, with a professional, internationally recruited management team responsible for operational management.
Seed funding: The government could provide initial funding to launch the fund of funds and act as a catalyst. This would help gain the trust of other investors and provide the fund with a solid foundation.
Risk-sharing through guarantees: One option would be for the government to provide guarantees for a portion of the investments. This would reduce the risk for private investors, which could particularly attract risk-averse investors such as pension funds and foundations.
It is important to emphasize that the specific form and extent of government involvement have not yet been finalized and will depend on political decisions.
The "Austrian component" is a central aspect of the planned fund of funds and is intended to ensure that a significant portion of value creation takes place in Austria. This is being pursued in several ways:
Investments in Austrian funds: A significant portion of the fund of funds’ capital will be invested in venture capital and private equity funds, which in turn invest in Austrian companies in the growth phase.
Focus on growth financing: The fund of funds is designed to close the financing gap during the growth phase, when Austrian companies often struggle to find capital to expand their business models. This is intended to prevent promising companies from moving abroad to obtain financing.
Strengthening the innovation ecosystem: By providing capital, the fund of funds aims to contribute to strengthening the entire innovation ecosystem in Austria. This includes promoting research and development, creating jobs, and increasing the competitiveness of the location.
Incentives for domestic investors: The fund of funds is also intended to help mobilize domestic investors such as pension funds, insurance companies, and foundations and encourage them to invest more in Austrian start-ups.
The structure of the fund of funds management is currently being finalized. The plan is to establish a professional and experienced team to achieve the best possible results for the location. The fund managers should have a proven track record and expertise in investing in target funds in order to identify promising investment opportunities and increase the value of the investments. An independent fund management structure is important to eliminate potential conflicts of interest and act in the best interests of investors.
In the media
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contact person
Stefan Haubner
BdV for Politics
Markus Lang
Board Member
Johanna Stolberg
Press Officer for Fund of Funds
Valentin Krenkel
Deputy Managing Director
Expert articles & news on the fund of funds
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