Los Angeles City Employees’ Retirement System continues to believe in venture and, in particular, large and mid-tier funds with scale-up capital.
The city pension manager bought into five funds last year, including those from Spark Capital, Technology Crossover Ventures and DFJ, according to a recent portfolio report. That’s two more than 2015 and one ahead of its 2014 purchase pace.
Backing expansion-stage startups appears to be today’s best bet.
The focus has been later and multi-stage funds. Half the dozen funds it holds with vintages of 2014 to 2016 have late-stage strategies. Another four invest in multistage funds, leaving only two with an early-stage approach.
The LP’s bias, as a result, extends to large and mid-sized funds. Four of its recent funds are larger than $1 billion, several substantially so. These include New Enterprise Associates 15, TCV IX and Institutional Venture Partners XV.
Another seven of the funds collected commitments between $340 million and $600 million. These include Spark Capital Growth Fund II and Longitude Venture Partners III.
Because the portfolio is young, many funds don’t yet have mature enough track records to compare. But of those that have put capital to work, Polaris Venture Partners VII comes out on top. The fund had an 18.1 percent IRR as of June with less than half its capital called, according to the report.
Second on the list was Oak HC/FT Partners with an IRR of 13.4 percent as of June. DFJ Growth 2013 was third with an IRR of 10.4 percent.
Details on all 12 funds can be found in the accompanying table, where we list commitments, distributions and IRRs.