The New York Police Pension Fund has been a hesitant investor in venture capital and this might be a good thing. Performance of the funds it holds has largely been unimpressive, according to a VCJ analysis of its latest portfolio report.
Only about 15% of the money manager’s active private equity funds from 2004 to the present are dedicated venture funds or funds with a balanced approach to investing that includes backing young companies.
Eleven of these 18 funds have negative IRRs or investment multiples below 1, the analysis of the June 2012 report shows. This is a substantial 61% of the portfolio. Seven can boast positive IRRs or investment multiples above 1.
The portfolio’s venture and venture-related funds lean to the mid-tier and smaller fund sizes. Five are early-stage funds and two are later-stage, according to data from Thomson Reuters (publisher of VCJ).
Unfortunately, four of those in the red have double-digital negative IRRs, including Aisling Capital III and NGN BioMed Opportunity II. Both are mid-life funds from 2008, which means they have time to recover. Also at the bottom of the list are the 2005 Prism Venture Partners V-A and the 2007 Highland Consumer Fund I.
In contrast, several of the pension fund’s holdings are real standouts and deserve mention. FirstMark IV from 2005 has an IRR of 43.5% and Scale Venture Partners III, a 2009 fund, sports a 39.8% IRR. Also doing well are FT Ventures III and RRE Ventures IV.
The accompanying chart shows holdings with their commitments and performance. The funds are sorted by investment multiple.