EU Venture Capital Initiative: Expert Group on Growth Capital Funds Meets

The Expert Group of the European Securities Committee on EU venture and growth capital funds convenes to advance proposals for deepening European capital markets for innovation.

European Venture Capital: Expert Group Tackles the Scale Problem

The Expert Group of the European Securities Committee on EU venture and growth capital funds initiative convened for its April 16 meeting following preparatory work completed in late March, addressing the perennial challenge of why European venture capital markets remain fragmented and undersized relative to the United States despite Europe producing world-class technological talent and research output. The Expert Group, which brings together fund managers, institutional investors, regulatory experts, and Commission officials, is developing concrete proposals for regulatory and market structure reforms that could unlock significantly more capital for European growth companies.

The gap between European and American venture capital markets is not merely a matter of scale — it reflects structural differences in how pension funds, insurance companies, and other institutional investors approach private equity and venture allocations. European institutional investors are generally more conservative in their alternative asset allocations than American counterparts, constrained by a combination of regulatory requirements, accounting standards, and cultural attitudes toward risk that reduce the flow of patient long-term capital into high-growth, high-risk companies. The Expert Group is examining whether regulatory changes — including modifications to Solvency II insurance capital requirements and IORP pension fund investment rules — could unlock institutional capital for European venture without compromising financial stability.