Microsatellite manufacturer ICEYE (pictured above) is one of the previous future fund’s co-investment companies. Photo: ICEYE

Microsatellite manufacturer ICEYE (pictured above) is one of the previous future fund’s co-investment companies. Photo: ICEYE

The grand duchy’s ministries of finance and economy, the SNCI and the EIF on 17 March launched the Luxembourg Future Fund 2, picking up the baton from the Luxembourg Future Fund 1. 

The Luxembourg Future Fund 1 (LFF1) has a successor. The fund, launched in 2015 to stimulate the diversification and sustainable development of the Luxembourg economy by attracting venture capital fund managers and younger innovative businesses to the country, has reached the end of its active investment period at the end of 2022. The Société Nationale de Crédit et d’Investissement (SNCI) and the European Investment Fund (EIF) had contributed €120m and €30m respectively and have decided to contribute to the new fund too. 

For the Luxembourg Future Fund 2 (LFF2), the EIF has committed up to €40m while the public-law banking institution SNCI will contribute up to €160m. This, the government hopes, will “provide additional firepower in support of innovative projects in Luxembourg.”

As LFF1, LFF2 will take place in the form of fund commitments and co-investments.

However, LFF2 will distinguish itself from LFF1 in part through its investment scope, which will be broader and will include investment funds and businesses already established in the country, as well as provide hybrid debt-equity investments so that it can also target more mature innovative companies.

At a press conference, finance minister (DP) said: “With the launch of the LFF 2, we will pursue a unique partnership that is built on the EIF’s deep expertise of managing public policy focused investment initiatives and the SNCI’s as well as the Ministries’ knowledge of the Luxembourg economy.”

She continued: “This complementarity helps focus investments in innovative technologies that will generate a sustainable and positive impact in key sectors like finance and climate technologies, thus contributing to the further diversification of our economy.” Economy minister (LSAP) qualified the LFF2 as “an important tool in driving forward the diversification of the Luxembourg economy and the development of its strategic sectors.”

LFF1’s portfolio by the end of 2022 included VC fund commitments GP Bullhound Fund V or co-investments in SolarisBank AG. Many commitments and investments targeted innovative technology, cybersecurity, fintech and the new space sector.