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Fund performance: Menlo, Highland and Austin gain in MassPRIM portfolio

It is little surprise that funds from Union Square Ventures and Spark Capital top the list of the best performing venture investments at the Massachusetts Pension Reserves Investment Management Board.

Battery Ventures and Insight Venture Partners also are well represented.

Less expected are which funds made the greatest progress over the past year in MassPRIM’s 2003 to 2008 venture portfolio. Here you find names such as Menlo Ventures, Highland Capital Partners and Austin Ventures, according to the pension manager’s most recent portfolio report. These middle of the pack performers gained ground during 2013, although they still have more room to go.

New Enterprise Associates 11 also advanced and is a smart performer. El Dorado Ventures VII improved noticeably, too, but still shows a negative IRR, according to the report updating returns to December 2013.

The pension fund’s 2003 to 2008 portfolio contains 30 venture funds with a broad mix of early to late to balanced strategies. About half are strong performers. Many of these have IRRs well above 10 percent. (Interestingly, a good number of best performers are the younger funds of the bunch, those with vintages of 2007 and 2008.)

Nonetheless, all are maturing to the point that their IRRs are beginning to settle in place for the long term. The portfolio has 24 funds with positive IRRs and six with negative ones. Overall, performance is good.

As mentioned, Union Square Ventures 2004 is the leader of the pack with an IRR of 73.15 percent. It was up modestly during 2013 as the fund benefited from the sale of its portfolio company Tumblr.

Spark Capital II is second on the list with an IRR of 64.03 percent (it sold Adap.tv to AOL), followed by Union Square’s 2008 fund and the Battery Ventures VIII Side Fund, also from 2008 and sporting an IRR of 27.82 percent.

Among the biggest gainers in the portfolio is Austin Ventures IX from 2006, which saw its IRR rise during 2013 to 5.74 percent from 1.91 percent. Highland Capital Partners Fund VII also had a nice year. Its IRR advanced to 3.53 percent from 0.77 percent in December 2012. Menlo Ventures X broke out of the red and ended the year with a 0.66 percent IRR.

The better performing NEA 11 ended the year with an IRR of 14.52 percent, up from 8.58 percent in December 2012.

The accompanying table lists the 30 funds with their IRRs from December 2013, 2012 and 2011.