Fund performance: Early-stage strategy brings mixed results to CalSTRS

A small fund, early-stage investment strategy has brought mixed results to the California State Teachers’ Retirement System.

However, big gains have come from an unexpected source. Europe based Pond Venture Partners posted a major improvement to its third fund last year, according to a recent portfolio report.

CalSTRS holds 19 venture funds with mid-decade vintages of 2004 to 2006, including several large ones from the likes of New Enterprise Associates, Technology Crossover Ventures and VantagePoint Capital Partners.

Nearly two-thirds of the portfolio consists of funds of $275 million or less with generally an early-stage focus.

Results have been mixed. Twelve had positive IRRs as of March while seven were in negative territory. Half of those in the black had single-digit IRRs.

At the top of the portfolio, Summit Partners Venture Capital II-A held onto an IRR of 20.86 percent as of March, according to the report. Sofinnova Venture Partners VII, also a smart performer, maintained second place with an IRR of 18.41.

Pond Ventures III advanced smartly. Its IRR rose to 14.19 percent from -0.03 percent a year earlier, the report showed.

Several funds continued to struggle, including NGEN II and Syndicated Communications Venture Partners V.

The accompanying table lists the 19 funds along with capital commitments, distributions and IRRs.