Danish pension provider Sampension has said it is ready to increase European venture investments further but suggests that European Union (EU) regulatory requirements may act as barriers to investment.

The provider has been expanding its portfolio of investments in Danish ventures, having invested approximately DKK 650m.

Venture investments cover investments in start-ups or young companies with high growth potential and potentially high returns, but where the risk is also correspondingly high.

"There are many promising start-ups and young companies in the ecosystem in Denmark. We want to invest in them. First and foremost, to ensure a good return for our customers – of course we do not compromise on this – but also to help these companies, which, despite great potential, may have a challenge in raising capital," Sampension investment director, Henrik Olejasz Larsen, said.

The latest investment in Danish ventures was in SEED Capital's new fund. Larsen explained that Sampension has previously had good experience as an investor in several of SEED Capital's previous funds.

He said the previous funds delivered reasonable returns, including investments in successful companies such as Flatpay, Veo and Trustpilot, which is why the provider chose to invest in the new fund.

In addition to investments in four of SEED Capital's funds, Sampension has also invested in three of Heartcore Capital's funds and two of Dansk Vækstkapital's funds.

"We have invested in Danish venture for a number of years, and especially within the past 10 years, we have seen a positive development,” Larsen said.

However, Larsen noted that it is a “difficult area”, but that the Danish venture market, and the European market in general, has become more mature, and this is an area that has experienced an increasing professionalisation of foundations and managers.

“We want to support this development, and therefore we want to be involved when the European funds, including Danish ones, are there, and it makes sense in terms of returns," Larsen said.

"This also means that as the venture market matures in Denmark and Europe, we have gained greater exposure to this. And we expect to increase these investments – provided it can go hand in hand with a good return, and it is a professional organisation.

“At the same time, it is part of the story that venture investments are not straightforward, to say the least. On the contrary, they are quite troublesome. And this is also due to the regulation, much of which comes from the EU, but which is also implemented with a very strict interpretation in Denmark.

“More specifically, in practice for us, there are more or less the same regulatory requirements for small and large investments, and this means that we have to do the same work, regardless of whether it is an investment in a small Danish venture fund or a large American venture fund.”

Larsen added that one could wish for the implementation of a principle of proportionality, where the same requirements are not imposed on small investments as on large investments, but where the requirements are set to a greater extent on the risk of the overall portfolio.

He suggested that this would make investments in European growth companies less difficult and more attractive for pension companies.

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