New Jersey Buys Into Khosla’s New Fund, Sees Its Venture Portfolio Rise In Value Last Year: Slideshow

The New Jersey State Investment Council is newly jazzed about venture capital.

Last year, it committed to three new funds: Khosla Ventures IV, Tenaya Capital VI and General Catalyst Group VI, according to a December 2011 investment report.

The plan calls for the state’s pension funds to invest an additional $90 million in the asset class. That will take the council’s active commitments in a rather sparse portfolio to $290 million from $200 million, an increase of 45%.

Whether this is an early sign of changing LP sentiment toward venture is hard to say. But with the IPO market for venture funded startups cracking open and innovation rampant in sectors such as cloud computing, mobile Internet and social media, it has the potential to be a trend worth watching.

The new funds are broadly focused. Vinod Khosla’s latest early stage fund closed on $1.05 billion last year and has a cleantech and technology focus. Tenaya Capital’s 2011 later stage fund has a $300 million target and has yet to close, according to Thomson Reuters, publisher of this blog. General Catalyst closed a $500 million balanced stage fund in 2011 with an eye on technology, Thomson Reuters data show.

The New Jersey council earmarked $40 million for Tenaya, $25 million for Khosla and $25 million for General Catalyst, according to the December report.

The December report also shows that the state’s venture investments safely weathered last year’s financial market volatility. Investment values rose modestly, with cash distributions jumping, portfolio values increasing and investment multiples inching higher. New Jersey does not release fund IRRs, but instead uses a multiple comparing distributions and market value to cash in.

Perhaps the performance gave the council the confidence to make its new commitments.

The following slideshow looks at December and June investment values for the council’s four venture funds. The state’s investment division manages $69.6 billion in assets, as of December, for seven public pension funds.


[slide title=”JP Morgan Direct Venture Capital Institutional III”]

[slide title=”JP Morgan Pooled Venture Capital Institutional III”]

[slide title=”NB Crossroads Fund XVIII”]

[slide title=”NB/NJ Custom Investment Fund”]

[slide title=”Total NJ Investment Council Venture Portfolio”]