Sequoia Capital Reopens Door to University of California

The University of California found its way back into a Sequoia Capital fund last year after spending eight years in an investment-barred wilderness.

The university’s Board of Regents made a $30 million commitment to Sequoia Capital 2010, according to a Regents’ portfolio report updated through June of last year. No other investment details were available.

The fund is the first university investment in a Sequoia fund since the 2000 vintage Sequoia Capital X, portfolio reports show.

Sequoia stopped taking investments from its longtime LP in 2003, after a California court ordered public institutions with venture investments to disclose fund performance data. With the new investment, the University of California now has invested in 11 Sequoia funds over 28 years.

Sequoia and the Regents did not respond to e-mail messages seeking comment. (We will update the story if they do.)

The ban appears to have lifted early in the year. The Regents listed the investment in its June report, but not in its March report. The lack of details such as capital calls and distributions is not surprising given the early nature of the fund. The investment also is listed in the September report, which is the most recent available and which came out this week.

Sequoia Capital 2010 is a $1.36 billion vintage 2011 early and growth-stage fund targeting startups in the United States and China.

The ban against the university was not the only one venture firms placed on public pension funds and endowments in California and elsewhere, but it perhaps was the most highly publicized. The bans appeared in the years following the dot-com crash, when public pressures to examine fund performance sent chills through GPs.

In 2003, the Regents highlighted Sequoia’s decision in a press release that said the University of  California had received a letter from Sequoia booting it out of a new Sequoia fund and asking it to divest its ownership in 10 other funds. The university did not sell the funds.

But the university did draw the line on disclosing the performance of some of the funds in its portfolio. It has omitted performance data on its Sequoia, Accel Partners and Kleiner Perkins Caufield & Byers funds from its portfolio reports since 2003, a fact peHUB disclosed in a series of stories last fall. The Regents discloses fund performance data on more than 60 other venture funds.

PeHUB sought performance data about the Kleiner Perkins and Sequoia funds from the University of California, but the university down public records act request. Instead, the Regents released aggregate data bunching its Sequoia and Kleiner Perkins funds as two family groups. It did release performance data for its single Accel fund.

Thomson Reuters, which publishes peHUB, later filed suit against the Regents seeking the individual fund data on the Sequoia and Kleiner Perkins funds. The case is being argued in court.

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