The launch of the European Institutional Investors Pact: unlocking and mobilizing institutional capital for Europe’s growth

Invest Europe welcomes the launch of the European Institutional Investors Pact (EIIP), an important step within a broader ecosystem of initiatives aimed at unlocking and mobilising more of Europe's long-term capital towards its most innovative and ambitious companies.

At a time when Europe is seeking to strengthen its competitiveness, resilience and leadership, the Pact sends a strong signal that Europe is serious about scaling up its innovation ecosystem. Importantly, it recognises a fundamental reality: Europe needs both more capital and better conditions for capital deployment.

In fact, the Pact responds to many of the obstacles institutional investors have repeatedly identified as barriers to increasing allocations to venture capital (VC), growth capital and other private equity (PE) strategies. By combining an investment platform with a structured policy dialogue, the EIIP represents a first-of-its-kind attempt to tackle both sides of Europe's innovation financing challenge from the perspective of institutional investors.

Addressing expertise, access and scale barriers that build on the performance of private capital

First, the EIB Group's investment platform will help address the expertise, access to opportunities, and scale challenges that many institutional investors face.

Pension funds, insurers, banks and other institutional investors often lack specialised teams to assess PE/VC managers, opportunities or emerging sectors. Through the EIB Group and EIF's decades of experience investing in venture and growth funds across Europe, investors can access proven expertise and established fund ecosystems, rather than having to build these capabilities entirely in-house.

In addition, recognizing that European fund managers provide a critical access point for investors seeking exposure to Europe’s most innovative companies, the EIB Group’s investment platform will showcase investors such relevant funds where actively fundraising with a target fund size of €300 million and above. By bringing together investment opportunities and facilitating access to experienced managers, the platform can make European innovation investing more accessible and scalable for large institutional investors.

In doing so, the Pact helps investors access a reality that Invest Europe's data has long demonstrated, as the EIB Group's role is not to create an investment case where one does not exist, but rather help investors access an opportunity whose merits are already well established: European private capital offers a compelling investment proposition. Beyond supporting Europe's most innovative companies, private capital has consistently delivered strong, long-term returns, outperforming public market benchmarks and competing successfully with North American peers across a range of strategies:

• European VC funds have delivered 17.1% annual returns over the past 15 years, outperforming European public markets and even North American venture capital funds over 10 and 15-year horizons. They have also delivered a higher multiple on invested capital than their US counterparts, showing that backing European innovation can generate globally competitive returns,

• European growth capital funds have generated 14.2% annual returns since inception, significantly outperforming both large and small European listed companies,

• European buyout funds have delivered 14.7% annual returns since inception, more than double the 6.9% return of European public markets. They also perform consistently against North American peers while returning capital to investors faster than anywhere else in the world, and

• European private infrastructure funds have generated 8.8% annual returns since inception, outperforming listed infrastructure investments, and delivering a higher multiple on invested capital than North American infrastructure funds.

And beyond delivering strong absolute and relative performance, European private capital has also demonstrated consistency, resilience and attractive risk-adjusted returns over the long-term.

Yet despite this strong investment case, European institutional investors remain underallocated to venture and growth capital compared with their counterparts in other major markets. This is precisely where the Pact can make a difference, helping bridge the gap between available capital and the investment opportunities already present in Europe's ecosystem.

Creating a market worth investing in, across borders

Second, the policy dialogue forum recognises that capital mobilisation alone is not enough, and represents a necessary complement to the investment platform.

Institutional investors consistently highlight market fragmentation, diverging national interpretations of EU legislation and other regulatory barriers as factors influencing their investment decisions. Capital must not only be available, investors also need a competitive, integrated and attractive environment in which to deploy it.

Invest Europe’s data points to a clear opportunity. Cross-border investment activity within Europe has become increasingly important in recent years. In 2025:

• cross-border private capital investments within Europe reached €43.2 billion, representing 32% of all private capital investments in the continent, up from €28.5 billion in 2023, and

• in VC, the trend is equally visible: cross-border investments reached €6.8 billion in 2025, accounting for 34.5% of all VC investment in Europe, compared with 27.7% in 2023.

These figures suggest that investors are increasingly looking beyond national borders and that Europe's innovation and investment markets are becoming more interconnected.

The window of opportunity to build on this momentum is, however, inherently time sensitive. This is why the Pact's policy dialogue forum launched by the European Commission matters. It provides a dedicated and structured forum between policymakers and institutional investors to identify, examine and address the challenges that continue to hinder investment across Europe proactively, not only from the perspective of the companies seeking finance, as we usually do, but also from that of the institutional investors providing it. Bringing this side of the market into the conversation will help Europe translate growing investor interest into sustained investment at scale.

Working together to unlock Europe's potential

By bringing together the European Commission, the EIB Group and long-term investors around a common objective, the Pact represents an important piece of the puzzle.

And its strength lies exactly in its dual approach: helping institutional investors access attractive investment opportunities while creating a dedicated forum to address the barriers that continue to prevent capital from flowing efficiently across Europe. The EIIP is an important step towards delivering both.

As discussions move forward through both the policy dialogue forum and the investment platform, we look forward to contributing with practical solutions that will help build a more integrated, competitive and investor-friendly European market, one where institutional capital can more easily support innovation, growth and European competitiveness. And more importantly, we look forward to transforming today's momentum around scaleups into a broader ecosystem effort, to ensure that capital can flow more efficiently towards all promising European companies.