Slideshow: CalSTRS Top 10 Performing Funds

Imagine committing $500 million to 10 private equity and venture capital funds, seeing $444 million drawn down, then kicking back and relaxing as more than $1.8 billion funnels back from your able general partners over the next several years.

Such has been the good fortune of the California State Teachers’ Retirement System–if you count only the top 10 investments it ever made in the asset class, out of some 249 funds backed since 1989. Those top 10 have generated a 4.2x cash-on-cash return, by our count, and that doesn’t include the value of remaining holdings (which CalSTRS doesn’t disclose in its Sept. 30 2010 performance numbers).

All told, our calculations show CalSTRS achieving a median IRR of 8.0 percent on its vintage-2006 and older collection of 182 funds as of Sept. 30. Breaking into the top-quartile meant hitting about a 16.5 percent IRR, while generating a -0.71 percent IRR or worse landed you in the bottom quartile. In other words, CalSTRS has so far lost money, on paper, on more than one in four of those funds–a far cry, no doubt, from what their managers promised. As for the top 10, shown in the slideshow below, mid-1990s venture funds are well-represented, as you would expect. But a subordinated debt fund? An opportunities fund from a certain distressed debt specialist expected to go public shortly? Both there as well.

[slideshow]

[slide title=”10 – OCM Opportunities Fund IVb LP”]

IRR:43.91 percent

Vintage: 2002

Capital Committed: $100 million

Capital Contributed: $48.6 million

Capital Distributed: $124.2 million

[slide title=”9 – First Reserve Fund IX LP”]

IRR:48.29 percent

Vintage: 2001

Capital Committed: $120 million

Capital Contributed: $120 million

Capital Distributed: $360.4 million

[slide title=”8 – Interwest Partners VI”]

IRR:48.91 percent

Vintage:1997

Capital Committed: $15 million

Capital Contributed: $15 million

Capital Distributed: $42.4 million

[slide title=”7 – Warburg, Pincus Ventures LP”]

IRR: 49.15 percent

Vintage: 1994

Capital Committed: $110 million

Capital Contributed: $110 million

Capital Distributed: $571.9 million

[slide title=”6 – Summit Subordinated Debt Fund II LP”]

IRR: 55.85 percent

Vintage: 1997

Capital Committed: $20 million

Capital Contributed: $18 million

Capital Distributed: $37.5 million

[slide title=”5 – Summit Ventures III LP”]

IRR:61.66 percent

Vintage: 1992

Capital Committed: $15 million

Capital Contributed: $13.5 million

Capital Distributed: $48.7 million

[slide title=”4 – Interwest Partners V”]

IRR: 62.32 percent

Vintage: 1993

Capital Committed: $15 million

Capital Contributed: $15 million

Capital Distributed: $66.0 million

[slide title=”3 – New Enterprise Associates VII LP”]

IRR: 63.71 percent

Vintage: 1996

Capital Committed: $40 million

Capital Contributed: $40 million

Capital Distributed: $131.3 million

[slide title=”2 – New Enterprise Associates VI LP”]

IRR: 65.5 percent

Vintage: 1993

Capital Committed: $35 million

Capital Contributed: $35 million

Capital Distributed: $277.5 million

[slide title=”1 – Summit Ventures IV LP”]

IRR: 103.77 percent

Vintage: 1995

Capital Committed: $30 million

Capital Contributed: $29.1 million

Capital Distributed: $219.4 million

[/slideshow]

Source: CalSTRS

David M. toll is editor-in-charge of Buyouts Magazine. Follow him @davidmtoll. Follow @Buyouts.