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European VC firm Creandum announced on Monday that it had closed its seventh fund — a €500m pot to back early-stage investments in Europe — in just 12 weeks. But that’s not the only news that caught my eye.
The fund’s LP base includes five of the eight largest US university endowments, pension funds and foundations. Pension funds being deployed into VC is common in places like the Nordics, but it’s rarer to see endowments backing firms.
Creandum partner Staffan Helgesson told me he can’t say which universities have invested in the fund. Some research, though, shows the biggest endowment funds belong to Stanford, Harvard and Yale, which all have tens of billions of dollars to their name.
“They [universities] have backed us for a long time, we just never thought of sharing it,” he said. “We only have one institutional LP since the beginning that decided to stop investing in us, so we only have space to let in maybe one or two new investors for each fund.”
It was Yale’s former endowment head, the late David Swensen, who pioneered the current model of diversifying endowment investments by putting some capital into asset classes like VC and private equity. He grew Yale’s fund from around $1bn in 1985 when he took over, to $42bn in 2021. Others in the US followed.
I asked Helgesson why we don’t see similar behaviour from the European universities that have big enough endowments, which is when he told me that one of Creandum’s 30 LPs is a university endowment fund based somewhere in Northern Europe (not the Nordics). He wouldn’t tell me which one.
He also told me that 80% of Creandum’s funds come from pension funds, university endowments and foundations. “This gives us more motivation,” he said, adding that Creandum will never raise capital from the Gulf or China.
I’ve not come across a press release that mentions university endowments as LPs in European VCs before, so I left the conversation with Helgesson wondering a few things. Which European university is copying its US counterparts and investing in VC? Are some European endowment funds more active as LPs in Europe than I thought? And if not, should they be? If you know more, let me know.
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