Government entities, including the European Investment Fund and national promotional banks, make up about one-third of the investors in EU-based venture capital funds, compared with 4% in the US, according to analysis by the European Central Bank of PitchBook data for 2015-2025. Pension funds account for between 10% and 19% of EU investors under the ECB's alternative estimates, while in the US pension funds and foundations are the dominant institutional groups, with foundations at 25% to 35%.

The Banque de France reached a similar picture in a note published on 18 February and updated on 24 September. For 2013-2023, public entities were 30% of venture investors in Europe and 4% in the US, it said, and private long-term investors “contribute 17 times less than in the United States.” European insurers held just 1.45% of their investments in private equity in the fourth quarter of 2024, it added.

A smaller pool of fund capital

The ECB puts total venture fund size at about €930 billion in the US against about €150 billion in the EU over 2015-2025, and says US venture funds invest about six times more than EU funds. It also notes that over 50% of the investments made by EU-located funds went to companies outside the EU in that period, compared with about 20% of US venture investments that went outside the US.

“Europe lacks large-scale VC funds, which is part of a broader issue with the ecosystem for scale-ups,” the ECB wrote, adding that “the scale-up investments required exceed the amounts individual VC funds in Europe can provide.” It links the gap to small fund sizes, fragmentation of the Single Market and weak exit options.

What the central bankers recommend

The ECB's recommendations include “increasing the buy-in of EU institutional investors and addressing fragmentation in the sector,” using the European Investment Fund as a credibility signal to draw in private investors, and revisiting the regulatory framework for venture funds so that the EuVECA label is easier to qualify for and more attractive for larger funds. It argues that “the EU today is in a similar position to that of the United States before the ERISA reform,” a comparison with the US pension rules that preceded greater pension investment in venture.

The Banque de France's list is similar. It calls for pan-European funds large enough to scale start-ups, a deeper listed market that gives venture funds better exits, the European Investment Fund's ETCI 2.0 fund-of-funds due in 2026, a voluntary European Innovation Investment Pact, a revision of the EuVECA label that the Commission plans for 2026, and changes to Solvency II to ease insurers' access to long-term equity investment. It also cites the 2024 Draghi report, which it says identified Europe's lag in venture capital as one reason for its growing technology and productivity gap with the US.

A skeptical view

Not everyone expects pension money to move quickly. Global Venturing reported on 22 September that governments and sovereign wealth funds committed $37.4 billion to European venture funds over 2015-2025, against $6.5 billion from European pension funds. It cited the State of European Tech 2025 report, which found that UK and Irish pension funds put “a staggeringly low” 0.001% of assets under management into European venture capital in 2024, and reported that L&G is disbanding its venture team because property and infrastructure can meet government targets and are “more scalable and usually with clearer return expectations and fees than VC.” Its outlook: “Not much will change for pension allocation at least in the short-term.”

Sources and notes. ECB, Financial Integration and Structure in the Euro Area 2026, box on the investor landscape for venture capital (PitchBook data, 2015-2025); Banque de France, Billet 435 (18 February 2026, updated 24 September); Global Venturing (22 September 2026). Estimates of investor shares differ by definition and source, and the ECB itself gives ranges for pension funds and foundations. The ECB's fund-size figures are approximate. Thumbnail photo: “European Central Bank, Frankfurt, Germany” by yeowatzup via Wikimedia Commons, licensed under CC BY 2.0. Illustrative photo taken in Frankfurt showing the euro sign sculpture; it does not depict the figures described.