A Vi Partners Perspective: Switzerland Builds the Companies. It Lets Others Own Them.
July 2026 | Gaetano Zanon | Vi Partners

A French version of this opinion piece was published in Le Temps can be found here.

Switzerland holds two distinct competitive advantages: it runs one of the densest innovation engines in the world, and it sits on one of the largest pools of long-term capital in Europe. However, the country fails to capitalise on this unique positioning. The companies get built here. The capital that scales them, and captures most of the upside, increasingly comes from somewhere else.

This is not a rant against the ecosystem. It is an observation about where the value goes. We have the tools at our disposal to fix this assymetry, so how can we reconcile this paradox?

The capital is here, but so is the door

Swiss pension funds manage roughly CHF 1.2 trillion (at the end of 2024, across some 1,292 institutions, equivalent to about 148% of GDP). Add insurers, foundations, and the family-office and wealth management capital that firms like ours work alongside, and Switzerland is sitting on a very deep, very patient balance sheet. Patient capital is precisely what venture and growth requires.

The regulatory door is already open, and this is the part many investors have not fully registered. Since January 2022, the revised BVV 2 ordinance treats unlisted Swiss investments as a standalone category, with a permitted allocation of up to 5% of total assets. That sits on top of the existing 15% ceiling for alternatives, not inside it. A venture or growth fund that directs more than half its capital to companies headquartered or operating in Switzerland qualifies. The framework that governs the rest of the allocation is the prudent investor principle, the same standard that already governs every other line in the portfolio.

The scale this unlocks is easy to underestimate. The 5% pocket, applied to CHF 1.2 trillion, is roughly CHF 61 billion of potential headroom for domestic innovation. Nobody is proposing the full figure, and any allocation would build over years rather than at once. But the conservative case is worth highlighting. Swiss start-ups raised about CHF 3 billion from all sources in 2025. If pension funds committed even half that headroom over a decade, that is on the order of CHF 3 billion a year of fresh capital, enough on its own to roughly double what reaches Swiss innovation, and to do it with Swiss money capturing the returns. The prize is not only the returns. It is value retained in the domestic economy, high-quality jobs built and kept at home, and a Switzerland whose standing as a global innovation leader is financed from within rather than underwritten by others. It is, in effect, the ambition the Deep Tech Nation Foundation has already set out, CHF 50 billion by 2033 and up to 100,000 jobs. The reform put it within reach. It has simply gone unused.

So why has the BVV 2 reform failed to fuel investment in our innovation ecosystem? Four years on, there is no clear structural increase in pension exposure to the asset class, and Switzerland has not paired the rule change with a crowding-in mechanism of the kind France built with Tibi (EUR 15bn mobilised) or Germany with its WIN initiative (EUR 2.6bn invested and more to come). The limiting factor is therefore not legal. It’s underpinned by liquidity appetite, governance capacity, cost sensitivity, and limited internal resourcing. Those are problems we can solve.

The returns argument

Three objections recur whenever we discuss the asset class with allocators: it is too risky (we’ve previously written some version of this here), Europe lags the US, and the illiquidity makes returns unplannable. The data says otherwise.

The relevant unit to assess risk is not a single start-up but a diversified portfolio of funds. Once an investor holds the equivalent of a few funds, or somewhere north of one hundred underlying companies, negative returns at the portfolio level become very unlikely. The power-law distribution that makes any individual deal binary is precisely what diversification neutralises. Return dispersion is a feature of the asset class and can be proactively managed once you hold a broadely diversified exposure.

Looking at performance across the asset class, European venture and growth funds have delivered net internal rates of return in the area of 13 to 21% over five to twenty-year horizons (Invest Europe, drawing on Cambridge Associates), broadly matching US peers and global buyout over full cycles, with materially lower correlation to public markets and bonds. For the first time, Switzerland now has its own evidence base as well: the University of Basel, SECA, and the Deep Tech Nation Switzerland Foundation have published the country's first comprehensive study of Swiss VC fund returns, so the conversation no longer has to rely entirely on European of US aggregates.

On planning, both the illiquidity and the J-curve are inherent features of the asset class. Capital goes out over the first years, distributions arrive later, and the position cannot be unwound on a quarter's notice. However, that profile is a strong match for liabilities measured in decades, which is exactly what a pension fund or a multi-generational family balance sheet carries. The mismatch people fear is, on closer inspection, an alignment. We should also mentions that secondary markets are also broadening across the Swiss and wider European private markets, offering alternatives for asset allocators to take a more proactive approach to liquidity planning.

The sovereignty argument

Switzerland does not have an innovation problem. It has been first in the Global Innovation Index for fifteen consecutive years. ETH Zurich and EPFL have produced more than 500 spin-offs in the past decade and, between them, more venture-backed robotics companies than the next eight European universities combined. In 2025, Swiss start-ups raised CHF 2.95 billion across 354 rounds, up almost 24% and the first annual rise since 2022, with a record CHF 1.1 billion flowing into seed and Series A. On a per-capita basis Switzerland ranks second in Europe, behind only Finland.

What Switzerland has is a financing problem. At the late stage, where companies scale, foreign investors supply roughly 88% of deep-tech funding in rounds above $100 million, with US investors providing more than half. Domestic capital backs close to a third of early-stage rounds but falls to around 12% at the top end. In the first half of 2025 alone, US investors put more than CHF 520 million into Swiss start-ups, over a third of the total and a record. The pattern is most visible at the exit. Switzerland produced several of Europe's largest technology and biotech exits in 2025, and the headline names were all university spin-outs. Nexthink, out of EPFL, agreed a majority sale to Vista Equity Partners at a roughly $3 billion valuation. u-blox, an ETH spin-off, was taken private by Advent International for CHF 1.05 billion. And Araris Biotech, a Paul Scherrer Institute spin-out within the ETH domain, was acquired by Japan's Taiho for $1 billion. Vi Partners was the first institutional investor in Nexthink and an early backer of Araris.

These are extraordinary outcomes. The uncomfortable question is who held the equity when the value was created. When the cheque that scales the company comes from abroad, the control, the follow-on returns, and eventually the headquarters logic migrate abroad. Switzerland ends up exporting its best companies as financial product to other people's portfolios, while its own institutions sit in bonds and real estate (a topic I’ve discussed here).

The ecosystem has noticed. The Deep Tech Nation Switzerland Foundation, backed by leading Swiss corporates including Swisscom, UBS, Swiss Re and SIX, has set itself the goal of mobilising CHF 50 billion in venture capital and creating 100,000 jobs by 2033, with the explicit aim of keeping more of the value created at home. That target is achievable, but only if institutional capital actually moves. The 5% BVV 2 pocket exists precisely to unlock this problem.

What would actually change the picture

While our country has the correct legal framework to ensure more value gets created and stays in Switzerland, three things would ensure it actually translate into broader funding for the domestic innovation ecosystem.

First, treat venture and growth as a strategic asset allocation decision, not a tactical afterthought. The choice to allocate (or not) is made in the SAA, and a fund that has not explicitely included growth and venture as part of its long-term allocation arithmetic cannot bolt it on later given the multi-year framework necessary to build a diversified portfolio. The decision has to be taken deliberately, with board mandate, before moving on to implementation.

Second, build or buy the capacity to do it well. The barrier most Swiss institutions hit is not appetite but resourcing: manager selection, due diligence, and monitoring require expertise that smaller funds do not hold in-house. Fund-of-funds, separately managed accounts, and partnership with established managers exist to address this deficit, and they are the sensible entry route for an investor without a dedicated private-markets team.

There is also a question of where this capital ends up. When Swiss institutions do reach the asset class, it’s often through fund-of-funds that are themselves US-managed and that tilt their commitments heavily toward US general partners. The result is that Swiss pension capital, once it finally arrives, ends up financing American innovation rather than Swiss. That is a curious outcome when comparable returns are available at home without associated foreign exchange costs: the translation of dollar returns back into francs, and a structural, decades-long exposure to a currency that has tended to weaken against the Swiss franc. A franc-domiciled, franc-aligned programme captures the same return profile and removes both. The choice of vehicle is therefore not only an operational decision. It determines whose economy your beneficiaries' capital ends up building, and where high quality jobs get created.                 

Third, consider whether Switzerland needs its own crowding-in mechanism. France and Germany both paired regulatory openness with a public co-investment vehicle that gave institutions a credible first mover to follow. Switzerland has chosen not to, and the flat allocation numbers since 2022 suggest the rule change alone was not sufficient. This is the part where policymakers, not just allocators, have a role.

The bottom line

Switzerland has the research, the companies, the capital, and now the regulatory permission. What it has been missing is the implementation. The result is a country that quietly subsidises its own innovation for the benefit of foreign balance sheets, and then wonders why the value created on its campuses accrues elsewhere.

None of this requires heroics or new subsidies. It requires Swiss institutions to use an allocation the law already grants them, treat the illiquidity as the asset it is against long-dated liabilities, and decide that the companies built here are worth owning from here. The case is not sentimental. The returns stand on their own. Sovereignty is the cherry on the cake.

At Vi Partners we have spent twenty-five years investing in this part of the market, late seed to Series A, predominantly Swiss, and we have watched too many great Swiss companies grow up on other people's capital. The opportunity in front of Swiss investors is rare: a returns case and a strategic case that point the same direction. It is time to act on both.