Slideshow: Early Stage Funds Dominate CalPERS’ Top 10 Venture Funds
We at peHUB dissected CalPERS’ venture portfolio from a variety of angles over the past few weeks.
We looked at brand-name funds and their results. We zeroed in on the pension fund’s most recent investments and the rising tide of interest it showed for venture in the middle of the past decade as economic conditions improved. (PeHUB registration is required to follow some of these links, links, links, and links.)
Here is a final cut at the holdings. Today we highlight the LP’s top-performing funds (ranked by IRR) of the past decade and their investment focus.
What we found is interesting and perhaps not unexpected. Early stage funds have brought in consistently the highest internal rates of return, particularly those with an eye toward tech investing. Five of the funds with the best IRRs are early and seed stage funds, according to peHUB’s analysis of CalPERS’ most current online portfolio information using data from Thomson Reuters (publisher of this blog). Three have a balanced or generalist’s approach and one is a late stage fund.
Separately, it is worth noting that six of the funds in the top 10 have placed at least two-thirds of their capital with startups developing software, Internet services, semiconductors and other products underpinning the use of computers. To be fair, three of these funds have a significant minority focus on health care investing and two of the top 10 funds have a majority focus on health care investing. In addition, two funds have put slightly over a fifth of their money with energy or cleantech-related companies. But high tech seems to rule the day.
Who’s at the top of the leader board? Watch our slideshow to find out.
Vintage: 2007
Firm: Flagship Ventures
Focus: Early Stage
Commitments: $15 million
Cap In: $8.9 million
Cap Out: 0
Portfolio Value and Cap Out: $11.5 million
IRR: 17.6%
LG said on August 9, 2011
“Five of the funds with the best IRRs are early and seed stage funds…”
Yes, but CALPERS has invested $115M in these five funds and have only realized $8M to date so we have no idea where they’ll end up. All you’ve shown is when you have an early stage fund that hasn’t been around very long, a few paper markups on the Series B rounds can really move the fund IRR.