Key Takeaways
- • Joe Schorge and Chris Wade, cofounders of newly launched Isomer Capital, are targeting pension funds to deploy billions into European venture capital, addressing a significant capital allocation gap between US and European tech ecosystems.
- • European startups operate with approximately one-fifth of the capital available in the US, despite the emergence of a mature and profitable tech sector; pension funds have historically avoided European VC investments in favor of established US firms like Sequoia and Andreessen Horowitz.
- • Global pension fund assets totaled over $36 trillion (£25 trillion) as of 2014, representing an enormous untapped reservoir for European venture capital deployment, with both public and private pension funds serving as major capital sources for VC firms.
- • Schorge's 15-year track record managing pension fund capital through larger investment vehicles positions Isomer Capital as a credible intermediary, and Wade indicated ongoing discussions with multiple pension funds about investing directly in the firm.
- • The investment thesis reflects a structural market shift: European tech no longer carries the historical stigma of value destruction, making pension fund reallocation strategically defensible to beneficiaries and trustees alike.
Summary
Isomer Capital, a newly launched London-based venture capital firm founded by Joe Schorge and Chris Wade, is pursuing a deliberate strategy to redirect institutional pension fund capital into European tech startups. The core proposition addresses a persistent capital allocation inefficiency: while global pension funds held over $36 trillion as of 2014, the vast majority of venture capital deployment from these institutions has historically flowed to established US firms rather than European alternatives.
Wade articulated the supply-demand imbalance directly to Business Insider: European startups are being developed "with about 1/5 of the capital that's available in the US," yet major pension funds have systematically declined to invest in European VC funds despite the maturation of the continent's technology ecosystem. This capital scarcity persists even as European tech has shed its historical reputation for underperformance. Wade noted that "it's no longer the case that you lose money when you invest in European tech"—a critical reframing for fiduciaries bound by prudence obligations.
Schorge's background provides credibility for this institutional pivot. Having spent 15 years deploying pension fund capital through larger investment vehicles, he represents what Wade characterized as "a safe pair of hands" to pension fund trustees and investment committees evaluating European VC exposure. Wade indicated active fundraising discussions with multiple pension funds, though declined to identify specific LPs, suggesting Isomer Capital is in advanced conversations with several large institutional investors.
Both public and private pension funds serve as foundational capital sources for venture capital firms globally, making their allocation decisions strategically significant for ecosystem development. The Isomer Capital thesis depends on shifting pension fund asset allocation toward European venture capital—a structural redeployment that would address the capital availability gap constraining European startup growth relative to US counterparts.
Wade articulated the supply-demand imbalance directly to Business Insider: European startups are being developed "with about 1/5 of the capital that's available in the US," yet major pension funds have systematically declined to invest in European VC funds despite the maturation of the continent's technology ecosystem. This capital scarcity persists even as European tech has shed its historical reputation for underperformance. Wade noted that "it's no longer the case that you lose money when you invest in European tech"—a critical reframing for fiduciaries bound by prudence obligations.
Schorge's background provides credibility for this institutional pivot. Having spent 15 years deploying pension fund capital through larger investment vehicles, he represents what Wade characterized as "a safe pair of hands" to pension fund trustees and investment committees evaluating European VC exposure. Wade indicated active fundraising discussions with multiple pension funds, though declined to identify specific LPs, suggesting Isomer Capital is in advanced conversations with several large institutional investors.
Both public and private pension funds serve as foundational capital sources for venture capital firms globally, making their allocation decisions strategically significant for ecosystem development. The Isomer Capital thesis depends on shifting pension fund asset allocation toward European venture capital—a structural redeployment that would address the capital availability gap constraining European startup growth relative to US counterparts.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.