Fund performance: Aging venture portfolio loses ground in Hawaii ERS portfolio; Canaan remains on top

A maturing portfolio of near end-of-life funds at the Hawaii Employees’ Retirement System has felt the retrenchment of the past 1½ years, but Canaan Partners’ seventh fund remains on top.

All but two of the funds in the portfolio saw their performance pull back in the nine quarters ended March 2016, according to a recent performance report. Several dropped significantly.

But the top performer remains 2005 Canaan VII, though it, too, suffered over the period. The $450 million fund, which invests in early-stage tech and life sciences, was an investor in Lending Club, which went public in late 2015. The fund also has backed a number of biotech companies that have launched IPOs, including Durata Therapeutics and Marinus Pharmaceuticals Inc, among others.

The state pension fund’s portfolio of 12 vintage 2004 to 2006 funds favors mid-tier early and multi-stage funds. Three-quarters are between $300 million and $650 million in size. More than half invest across stages.

The holdings also include two larger New Enterprise Associates funds.

The top fund, Canaan VII, had an IRR of 17.66 percent as of March with substantial value still in its portfolio, according to the report. Still, this is down from 24.46 percent in December 2014.

Next on the list is Thomas, McNerney & Partners II from 2006, which has an IRR of 17.39 percent as of March.

Alta Partner VIII was in third place with an IRR of 16.64 percent.

Funds from New Enterprise Associates and M/C Partners also performed well, though M/C Venture Partners VI lost ground.

The entire portfolio is available in the attached spreadsheet along with commitments, distributions and IRRs.