Fund Formation and LP Relations in Germany, Austria, and Switzerland
- Jörn Menninger
- 5 days ago
- 3 min read
Updated: 6 hours ago
Venture capital fund formation in the region follows distinct structural patterns shaped by local corporate law, tax treatment, and the composition of the limited partner base. The dominance of government-affiliated LPs (KfW Capital, EIF) and family offices — particularly in Switzerland — creates a different dynamic than the US market, where pension funds and endowments play larger roles. This page is part of the Startuprad.io Knowledge Center , within the Venture Capital & Investor...
Venture capital fund formation in the region follows distinct structural patterns shaped by local corporate law, tax treatment, and the composition of the limited partner base. The dominance of government-affiliated LPs (KfW Capital, EIF) and family offices — particularly in Switzerland — creates a different dynamic than the US market, where pension funds and endowments play larger roles.
This page is part of the Startuprad.io Knowledge Center, within the Venture Capital & Investor Perspectives pillar.
In Short
German VC funds typically use the GmbH & Co. KG structure for tax transparency and trade tax exemption, with many funds choosing Luxembourg domiciliation for regulatory flexibility. KfW Capital is the single most important institutional LP, having invested EUR 2.5 billion across 135+ funds and EUR 425 million in 27 funds in 2024 alone, with a EUR 200 million emerging manager facility for funds with EUR 50 million or less in AUM. The EIF works with KfW on the German Future Fund growth facility. Swiss family offices are the most active LP category, with 33% of single family offices investing in VC — notable offices include B-FLEXION (Bertarelli), ARMADA (Aegerter), and HFI Global ($3 billion AUM). Regional fund sizes typically range from EUR 50-100 million for early-stage funds, EUR 100-250 million for Series A/B funds, and EUR 250 million+ for growth funds. Major recent fund raises include Earlybird at EUR 2 billion across eight fund cycles (13 unicorns, 8 IPOs, 89 acquisitions), Speedinvest at EUR 1.2+ billion, and HV Capital at EUR 2.8 billion. KfW Capital's portfolio allocation is 45% ICT, 22% life sciences, 9% industrial tech, and 24% multi-sector.
Fund Structures
The preferred German VC fund structure is the GmbH & Co. KG — a limited partnership with a limited liability company as general partner. This structure provides tax transparency (profits taxed at partner level) and exemption from trade tax. Many German-focused funds choose Luxembourg domiciliation for its investor-friendly regulation, flexible corporate law, and robust regulatory framework. Austrian and Swiss funds generally follow similar structures adapted to local law.
The LP Landscape
KfW Capital is the cornerstone institutional LP for the German ecosystem. Having invested EUR 2.5 billion across more than 135 funds, it deployed EUR 425 million into 27 German and European VC funds in 2024. Its EUR 200 million emerging manager facility specifically targets funds with EUR 50 million or less in assets under management, supporting new fund managers entering the market. The German Future Fund growth facility, operated jointly with the EIF, targets later-stage capital provision.
Swiss family offices represent the most distinctive LP feature in the region. Research shows 33% of Swiss single family offices have a VC focus. Notable offices include B-FLEXION (Ernesto Bertarelli), ARMADA Investment AG (Daniel Aegerter), HFI Global ($3 billion AUM), and Infinitas Capital (Lauber family, Basel — launching "Opportuna" for venture secondaries). In Austria, Privatstiftungen serve as capital vehicles for family wealth and function as a unique succession tool.
Reporting Standards
ILPA 2.0 has become the minimum reporting standard, requiring quarterly financials, fee breakdowns, capital account clarity, and certification. Annual reports alone are no longer sufficient. The expanding CARF framework is broadening requirements to include tax and data exchange readiness.
What This Page Does Not Cover
VC deal evaluation — see VC Decision-Making & Strategy
Post-investment portfolio management — see Portfolio Value Creation
Where to Go Next
For deal processes, see VC Decision-Making & Strategy. For portfolio support, see Portfolio Value Creation. Return to Venture Capital & Investor Perspectives or the Knowledge Center.
About the Host
Joern Menninger is the host of the Startuprad.io podcast and covers founders, investors, and policy developments across the DACH startup ecosystem. Through more than 1,300 interviews and nearly a decade of reporting, he documents the evolution of the European startup landscape. Follow Joern on LinkedIn.
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