Asset AllocationMarch 3, 2022

A Latvian State-Funded Pension Invests in Venture Capital for the First Time

The move is part of a growing trend of Baltic institutional investors looking to alternatives.

Reported by Anna Gordon

CBL Asset Management Active Pension Plan, a publicly funded pension in the Baltic country of Latvia, is investing in venture capital for the first time. This is part of an increasing trend of Baltic pension funds venturing further into the alternatives space.

CBL Asset Management is planning to invest €5 million ($5.5 million) into a venture capital fund called Change Ventures II, which focuses on funding businesses across the Baltics region in Eastern Europe. It also funds businesses founded by members of the Baltic diaspora.

Delighted that @CBL_AM made their first #VC fund commitment to @changeventures, grateful for their support for backing ambitious #Baltic founders. We look forward to more pension funds in the region investing in the asset class cc @LVCA_info https://t.co/1pPT1m1fc2
— Change Ventures (@changeventures) March 3, 2022

The pension currently has approximately €800 million ($900 million) in assets under management. The investment will make up approximately 0.6% of the fund’s total portfolio.

Change Ventures focuses on businesses that have potential for global scaling, according to its website. Some of its featured investments include Veriff and Gelatex.. Started in Estonia in 2015, Veriff creates identity verification products to help reduce fraud. Gelatex is a lab-based meat company that uses scaffolding technology to overcome hurdles that previous lab meat efforts have faced.

Andris Kotāns, the senior fund manager at CBL Asset Management, told IPE Magazine that one of the reasons the pension was excited to invest in venture capital is that it gives it further opportunity to invest in the regional economy. Traditionally, the public equities market has had fewer opportunities for smaller, more emerging markets. Venture capital, on the other hand, has much more geographic diversity.