Fund performance: Mid-decade portfolio reflects difficult period for returns

Funds from Technology Crossover Ventures and Spark Capital lead a portfolio of mid-decade investments at Los Angeles City Employees’ Retirement System.

But don’t sound the trumpets. The portfolio overall reflects a difficult period for venture returns, and its performance doesn’t leave much to crow about.

Only one of the dozen funds with vintages of 2004 to 2006 has managed an IRR in the double digits, according to a recent portfolio report from June 2016. And a pair in the basement won’t likely bring back much of their cash.

The portfolio favors an early- and multi-stage approach to investing with funds generally smaller than $300 million.

Over the 18 months ended in June, performance improvements have been tough to come by. Only three funds nudged their returns higher.

The best of the bunch is Technology Crossover Ventures V, which as of June had an IRR of 11.4 percent, the report shows.

The TCV vintage 2004 fund, which raised $900 million, invested in a number of companies that went public, including TechTarget, Renren, Zillow and others, according to Thomson Reuters.

Spark Capital I, a $259 million fund from 2005, had an IRR of 9.1 percent for second place in the portfolio, as of June.

Polaris Venture Partners V held onto an IRR of 8.4 percent as of June, the report shows.

Funds from Essex Woodlands Health Ventures, Oak Investment Partners and Trident Capital were less successful.

At the bottom of the portfolio was NGEN II with a negative IRR of 41.9 percent as of June 2016.

The full list of 12 funds can be found in the accompanying table with commitments, distributions and IRRs.