A large-fund venture strategy has paid dividends for the Public Employees’ Retirement System of Nevada.
The money manager’s mid-decade portfolio of 19 funds continued to advance last year led by strong gains from Menlo Ventures and Canaan Partners. Half of the venture portfolio had IRRs above 14 percent as of December, and almost a quarter above 20 percent, according to a recent performance report.
It is a respectable result for a vintage 2004 to 2009 portfolio.
What’s worth noting is Nevada PERS’ reliance on a large-fund strategy. About 40 percent of the venture funds are at the $1 billion mark or greater. Another 40 percent are between $400 million and $900 million in size.
All are managed by brand name firms, not just Menlo and Canaan, but Battery Ventures, Summit Partners, New Enterprise Associates and Technolgy Crossover Ventures.
At the head of the portfolio is Battery Ventures IX with an IRR of 34.1 percent, as of December, according the portfolio report. Distributions have lagged. Next in line, Battery Ventures VIII Side Fund, had an IRR of 31.1 percent.
Canaan VII, the firm’s 2005 fund, is third on the list with an IRR of 24.5 percent as of December, the report shows. The fund advanced from an IRR of 18.4 percent in December 2013.
Summit Partners Venture Capital Fund II and NEA 13 also turned in strong performances.
Menlo’s 2006 fund, Menlo Ventures X, saw its IRR increase to 10.9 percent in December 2014 from 0.3 percent a year earlier.
The accompanying chart lists all 19 funds with called capital, distributions, investment multiples and IRRs.