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Kilian Graulich B. G., Opalesque Geneva for New Managers: Investors withdrew large amounts from their public equity allocation last year, reconsidered fixed-income assets and made significant moves in private markets (private equity, private debt and venture capital).
Only this year, a State Street survey found that over two-thirds of institutional investors plan to continue growing their allocations to the private markets asset class despite the tough economic environment, with some of them expecting discounts on assets. Advisors are recommending allocations of 10% to 60% in private markets. Kern County Employees' Retirement Association in California, among others, said it planned to invest about $260m in private markets in 2023.
Three young, but nevertheless experienced angel investors certainly believe now is the time for venture capital. They co-founded Prediction Capital Ltd., a VC fund, in June 2022 to meet private investors' demand for co-investments in early-stage VC: Robin Lauber, entrepreneur and co-founder of family office Infinitas Capital, which backed the new firm; Kilian Graulich, former management consultant and consumer tech expert; and Christopher Chuffart, former VC investor, start-up executive and fintech expert.
Robin Lauber and Kilian Graulich will present our next webinar Hacking VC: How private investors can strategically access early-stage VC on March 2nd (details below).
High demand
"Before launching Prediction, we had a lot of private investors and families reaching out to us asking to participate in their early-stage VC deals," Kilian Graulich explains.
But despite the very high demand from private investors, in practice, it takes a lot of time and a lot of money to set up co-investment or special-purpose vehicles for each one. So, the co-founders decided to set up a proper LP structure and consolidate the investment activities under one umbrella, thereby giving every investor the opportunity to, instead of investing in one deal, invest in 20 to 30 deals through Prediction Capital's VC fund.
Since November, the fund has had its first closing for fundraising - the first of three rounds - finishing successfully with a first group of private investors, former entrepreneurs and family offices, Graulich says, adding that the fund's target is between €30 and €50m (US$33m to $53m). Furthermore, to date, the managers have made four investments and the next investments are being currently screened. Finally, the team has continued to widen their VC network with additional fund partnerships with universities, Tier-1 VCs, founders and business angels in order to get early access to the best deals.
The first investments
The new VC fund focuses on early-stage (primarily pre-seed and seed round) consumer tech and fintech investments in the DACH region (Germany, Austria, Switzerland). Across these two themes, the founders try to target impact investments and align their investments with the UN's Sustainable Development Goals (SDGs). Their current portfolio of start-ups has for example a focus on digital education, B2B SaaS, and businesses with environmental core models.
The first four investments were in Heritas, a fintech firm in Berlin that runs a digital data and guidance platform for heirs and testators; Foodetective, a consumer tech firm in Geneva that provides a master API platform for merchants; House of Change, a tech firm in Hamburg that supports corporates to plan and execute on their ESG agenda; and Bling!, another fintech firm in Berlin that provides a financial management app for children and parents.
Part 2 will be published in tomorrow's newsletter. It can be accessed here.
Next Webinar
In this interactive webinar, Robin Lauber and Kilian Graulich will discuss how private investors can strategically access early-stage VC, become more autonomous, and integrate ESG.
When: Thursday, March 2nd at 11am ET
Free registration: www.opalesque.com/webinar/
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