WEBVTT 1 00:00:00.240 --> 00:00:03.909 We see growing interest among pension funds in Switzerland and also 2 00:00:03.960 --> 00:00:06.120 elsewhere about venture capital. 3 00:00:06.130 --> 00:00:09.540 At the same time, venture capital is a complex asset class. 4 00:00:09.580 --> 00:00:13.420 It's difficult to evaluate, to assess, to monitor, 5 00:00:14.000 --> 00:00:17.220 and to think about how to integrate that in a portfolio. 6 00:00:17.660 --> 00:00:18.500 So the program 7 00:00:19.320 --> 00:00:22.080 intends to bring clarity to this complexity. 8 00:00:22.840 --> 00:00:26.700 And so we're going to do it approaching venture capital in four steps. 9 00:00:27.240 --> 00:00:31.100 So first, we're going to look into the internal functioning of venture 10 00:00:31.160 --> 00:00:34.920 capital funds. Very simply, we're going to do what we do in finance, we're going to 11 00:00:35.000 --> 00:00:38.600 follow the money, how capital is called from investors into the funds, 12 00:00:39.400 --> 00:00:42.690 how capital is invested by the funds into different startups, 13 00:00:43.640 --> 00:00:46.000 who gets the money, how, where, 14 00:00:46.900 --> 00:00:49.720 and then how capital is returned to investors. 15 00:00:49.760 --> 00:00:53.160 So we're going to follow this cycle. We're going to take a very practical approach. 16 00:00:54.480 --> 00:00:56.860 Second, we're going to consider financial performance. 17 00:00:57.760 --> 00:01:00.460 So we need to understand how to calculate and to define return. 18 00:01:01.060 --> 00:01:04.820 And it's not going to be so easy. There are different ways to calculate 19 00:01:04.880 --> 00:01:08.420 returns. We need to understand how they are calculated first 20 00:01:08.960 --> 00:01:12.020 and how different they are from traditional definition of returns. 21 00:01:12.660 --> 00:01:15.980 So in this space, we typically focus on internal rate of 22 00:01:16.020 --> 00:01:19.160 returns or different definitions of multiples. 23 00:01:19.840 --> 00:01:23.800 And so during the program, we want to understand what it means, and we also want 24 00:01:23.820 --> 00:01:27.660 to focus on the potential pitfalls because there's lots of confusion about what 25 00:01:27.680 --> 00:01:30.750 these numbers mean, and there's also room for manipulation. 26 00:01:30.930 --> 00:01:34.910 So we really need to bring clarity on understanding how returns are computed and 27 00:01:34.940 --> 00:01:37.990 what they really mean. Third, we're going to take a step back 28 00:01:38.820 --> 00:01:40.800 and consider venture capital as an asset class. 29 00:01:41.500 --> 00:01:45.380 So we want to understand its economic role, in particular in Switzerland, 30 00:01:46.200 --> 00:01:50.120 given all the innovation and startups we have, what role could that play or 31 00:01:50.180 --> 00:01:52.620 should that play? And then we're going to consider it 32 00:01:53.640 --> 00:01:57.580 in relationship with other asset classes, public markets, other 33 00:01:57.620 --> 00:02:01.380 types of private markets. We want to understand the characteristics, the 34 00:02:01.440 --> 00:02:04.500 determinants, and how they potentially move together or not. 35 00:02:05.420 --> 00:02:09.220 Fourth, we're going to take a very practical approach and understand how we can 36 00:02:09.301 --> 00:02:12.020 integrate this asset class into a portfolio. 37 00:02:12.030 --> 00:02:15.960 And we're going to ask specifically how a pension fund or whether a 38 00:02:16.000 --> 00:02:18.520 pension fund should consider investing in venture capital. 39 00:02:19.020 --> 00:02:22.560 In order to do that, we need to understand the risk-return profile of venture 40 00:02:22.580 --> 00:02:26.480 capital as an asset class, try to understand whether there are 41 00:02:26.520 --> 00:02:30.480 diversification benefits, where they're coming from, how can we 42 00:02:30.520 --> 00:02:34.280 operationalize that, and we need to think about how 43 00:02:34.320 --> 00:02:38.260 to allocate, how to select the funds into a portfolio that is 44 00:02:38.300 --> 00:02:39.700 suitable for long-term investors. 45 00:02:40.530 --> 00:02:44.380 So in the program, we're not going to focus on selecting specific 46 00:02:44.420 --> 00:02:47.720 funds or recommending different types of investments. 47 00:02:47.730 --> 00:02:51.640 So this is not the objective. The objective is to really try to understand 48 00:02:51.660 --> 00:02:55.580 what venture capital really is and what returns 49 00:02:55.720 --> 00:02:59.460 really mean for investors. So the objective is simple, to bring 50 00:02:59.500 --> 00:03:02.500 clarity to that complexity and to try to 51 00:03:03.200 --> 00:03:07.000 bring a very structured, informed-based approach 52 00:03:07.540 --> 00:03:09.980 that enables participants to make better decisions. 53 00:03:10.470 --> 00:03:14.250 So if venture capital is something that you consider in your strategic reflection, 54 00:03:14.930 --> 00:03:18.920 this program will provide you with the tools to approach it in a 55 00:03:19.020 --> 00:03:22.100 structured, intuitive, and informed way. 56 00:03:22.560 --> 00:03:26.500 The objective at the end of the class is that you understand what's going on 57 00:03:26.540 --> 00:03:27.140 in this industry.