California Pension Fund’s Diversified Approach To Venture Appears To Benefit Performance: Slideshow


If the definition of a savvy investor is diversification, discipline and the creative selection of fund managers, then the San Francisco Employees’ Retirement System’s venture portfolio should qualify.

SFERS, with $13 billion in net assets at the end of fiscal 2010 and 3.8% of its holdings in venture capital, has committed about $899 million to the asset class since the start of 2000, according to a peHUB analysis of its recent public portfolio report. That’s translated into investments in 45 funds, the analysis found.

Diversification appears to be the rule. Fifteen of the funds are early stage, eight are late and 20 qualify has having a balanced or generalist’s approach. The LP has two secondary fund investments and has participated in 10 funds of funds. (The funds of funds commitments have not been added into the venture allocations.)

Performance over the past decade is not yet clear, though it appears acceptable. Thirteen of the funds have positive IRRs and seven have negative ones. SFERS withholds IRRs from 25 funds with vintages of 2006 or more recent, but so far investment multiples for these funds look largely favorable.

Allocations vary but are consistently in the $10 million to $30 million range. The largest appears to be $50 million, though the size of two commitments for 2011 are not disclosed in a portfolio report updated to June 2011.

The pension fund’s selection of managers also stresses diversification. Included are some big name firms, such as Battery Ventures, Canaan Partners, Institutional Venture Partners and Draper Fisher Jurvetson. Other choices are less well known. The LP has recent funds from Weathergage Capital, Weston Presidio and DFJ Tamir Fishman Ventures.

In the following slideshow, peHUB highlights SFERS’ early stage investments in chronological order since the start of 2000 with commitment levels and IRRs, when available. In subsequent slideshows we will highlight other pieces of the portfolio.

[slideshow]

[slide title=”Technology Partners Fund VII”]

Vintage: 2000

Firm: Technology Partners

Commitment: $30 million

Cash In: $28.76 million

Cash Out: $8.37 million

Portfolio Value: $7.49 million

Investment Multiple: 0.55x

IRR: -13.1%

[slide title=”Morgenthaler Partners VII”]

Vintage: 2001

Firm: Morgenthaler Ventures

Commitment: $20 million

Cash In: $20 million

Cash Out: $11.6 million

Portfolio Value: $7.8 million

Investment Multiple: 0.97x

IRR: -0.64%

[slide title=”Knightsbridge Venture Capital VI”]

Vintage: 2004

Firm: Knightsbridge Advisors

Commitment: $10 million

Cash In: $8 million

Cash Out: 0

Portfolio Value: $8.07 million

Investment Multiple: 1.01x

IRR: 0.29%

[slide title=”Bay Partners XI”]

Vintage: 2005

Firm: Bay Partners

Commitment: $15 million

Cash In: $10.66 million

Cash Out: $1.22 million

Portfolio Value: $13.09 million

Investment Multiple: 1.34x

IRR: 9.99%

[slide title=”Polaris Venture Partners V”]

Vintage: 2006

Firm: Polaris Venture Partners

Commitment: $30 million

Cash In: $23.1 million

Cash Out: $1.69 million

Portfolio Value: $26.04 million

Investment Multiple: 1.2x

IRR: NA

[slide title=”Sofinnova Venture Partners VII”]

Vintage: 2007

Firm: Sofinnova Ventures

Commitment: $10 million

Cash In: $6.2 million

Cash Out: $2.28 million

Portfolio Value: $7.76 million

Investment Multiple: 1.62x

IRR: NA

[slide title=”Technology Partners Fund VIII”]

Vintage: 2007

Firm: Technology Partners

Commitment: $20 million

Cash In: $11.2 million

Cash Out: $1.73 million

Portfolio Value: $12.88 million

Investment Multiple: 1.3x

IRR: NA

[slide title=”InterWest X”]

Vintage: 2008

Firm: InterWest Partners

Commitment: $14.25 million

Cash In: $3.94 million

Cash Out: 0

Portfolio Value: $3.59 million

Investment Multiple: 0.91x

IRR: NA

[slide title=”Tamir Fishman Ventures II (sec. v. 2000)”]

Vintage: 2008

Firm: DFJ Tamir Fishman Ventures

Commitment: $5.52 million

Cash In: $5.52 million

Cash Out: $2.45 million

Portfolio Value: $2.93 million

Investment Multiple: 0.97x

IRR: NA

[slide title=”Tamir Fishman Ventures III”]

Vintage: 2008

Firm: DFJ Tamir Fishman Ventures

Commitment: $10.05 million

Cash In: $8.25 million

Cash Out: 0

Portfolio Value: $7.42 million

Investment Multiple: 0.9x

IRR: NA

[slide title=”New Enterprise Associates XIII”]

Vintage: 2009

Firm: New Enterprise Associates

Commitment: $15 million

Cash In: $6.08 million

Cash Out: $0.57 million

Portfolio Value: $6.13 million

Investment Multiple: 1.1x

IRR: NA

[slide title=”Trinity Ventures X”]

Vintage: 2009

Firm: Trinity Ventures

Commitment: $10 million

Cash In: $4.05 million

Cash Out: 0

Portfolio Value: $5.85 million

Investment Multiple: 1.44x

IRR: NA

[slide title=”Doll Capital Management VI”]

Vintage: 2010

Firm: DCM

Commitment: $10 million

Cash In: $3 million

Cash Out: 0

Portfolio Value: $3.05 million

Investment Multiple: 1.02x

IRR: NA

[slide title=”Draper Fisher Jurvetson Fund X”]

Vintage: 2010

Firm: Draper Fisher Jurvetson

Commitment: $10 million

Cash In: $2.58 million

Cash Out: 0

Portfolio Value: $2.33 million

Investment Multiple: 0.91x

IRR: NA

[slide title=”Polaris Venture Partners VI”]

Vintage: 2010

Firm: Polaris Venture Partners

Commitment: $20 million

Cash In: $0.2 million

Cash Out: 0

Portfolio Value: $0.14 million

Investment Multiple: 0.71x

IRR: NA

[/slideshow]