(Bloomberg) — German venture capital firm HV Capital is rolling out a new 430 million euro ($489 million) fund that will allow it to back portfolio companies for longer, underscoring a growing desire among tech investors to extend their bets in startups.
HV Capital’s funds typically invest within an eight to 10-year window, and its new continuation fund will take over existing holdings for an additional five years, allowing the firm to retain stakes for longer and generate more profits, General Partner David Kuczek said in an interview.
The new fund is backed by HarbourVest as anchor investor, along with LGT Capital Partners, Pathway Capital, and additional family offices and financial institutions, according to a statement.
Venture capitalists around the world have been looking at ways to hold onto their shares in fast-growing technology companies past typical exit milestones like an initial public offering, including Sequoia Capital, which restructured its funds in October so that it can invest in and hold public stocks indefinitely.
Private equity firms have also rolled over their investments in the past similar to HV’s move.
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Kuczek said the new fund will allow HV to hold onto its stakes in companies like FlixBus and Global Savings Group that will benefit from further time in private markets.
The new fund — which HV says is the first such one in the German VC tech sector — will include existing investments from three HV funds between 2010 to 2015, according to the statement. Campbell Lutyens advised HV on the transaction.
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