The exuberance is gone from cleantech venture investing, to put it politely.
Still, money pours into the sector and, more importantly, fund performance is on the rise. Last year, venture investors in the United States placed $4.6 billion with cleantech startups, a 16% increase from 2010 and an all-time high, topping the record set in 2008. In all, 342 companies raised money, with an additional 73 companies funded in the first quarter of 2012, according to the MoneyTree Report from the National Venture Capital Association and PricewaterhouseCoopers, based on data from Thomson Reuters (publisher of VCJ).
On the other end of the venture capital spectrum, returns seem to mirror the increase, at least if the CalPERS Clean Energy and Technology Fund portfolio is an indication.
The California Public Employees’ Retirement System holds 14 mostly venture and balanced cleantech funds in the CETF portfolio with Chrysalix Energy 3, Element Partners 2, the XPV Water Fund and USRG Power and Biofuels Fund III showing impressive gains.
In aggregate, 10 funds posted improved IRRs in the year ended December 2011 and four saw their IRRs drop, according to a VCJ analysis of the CalPERS portfolio report.
Still, all is not champagne and fireworks. The portfolio’s median fund return in December 2011 was -3.25% and five funds had negative returns while nine had positive ones. This was an improvement from a median of -12.65% in December 2010, the analysis shows.
In this month’s fund performance, we list the 14 funds in the portfolio from worst to best IRR and include the year-ago IRR for comparison. The portfolio is managed by Capital Dynamics and includes funds with vintages of 2006 to 2010.
The majority of the funds—nine—are from 2008.
VCJ used portfolio reports from December 2011 and December 2010 for its analysis.
| Cleantech Returns Improve | ||||||||
| Firm | Fund | Vintage | Commitment
($M) |
Cash In
($M) |
Cash Out
($M) |
Cash Out
& NAV ($M) |
IRR
as of 12/11 (%) |
IRR
as of 12/10 (%) |
| Braemar Energy Ventures | Braemar Energy Ventures II | 2007 | $19.80 | $11.10 | $0.00 | $12.80 | 6 | 11 |
| Nth Power | Nth Power Fund IV | 2007 | $9.90 | $6.80 | $0.05 | $4.20 | -16.7 | -22.4 |
| U.S. Renewables Group | USRG Power and Biofuels Fund II | 2007 | $54.50 | $46.70 | $1.10 | $47.00 | 0.2 | 12.7 |
| CalCEF Angel Fund | CalCEF Clean Energy Angel Fund I | 2008 | $1.30 | $0.90 | $0.00 | $0.70 | -13 | -19.8 |
| Chrysalix Venture Capital | Chrysalix Energy 3 | 2008 | $9.90 | $4.10 | $0.20 | $4.80 | 10.2 | -5.4 |
| Craton Equity Partners | Craton Equity Investors I | 2008 | $6.60 | $6.00 | $0.01 | $5.20 | -7.2 | -10 |
| Element Partners | Element Partners 2 | 2008 | $19.80 | $7.90 | $0.00 | $9.60 | 10.8 | 0.6 |
| Hudson Clean Energy Partners | Hudson Clean Energy Partners | 2008 | $39.60 | $32.50 | $15.00 | $40.30 | 11.4 | 7.6 |
| NGEN Partners | NGEN 3 | 2008 | $13.30 | $6.20 | $0.20 | $6.50 | 3.2 | -1.8 |
| RockPort Capital Partners | RockPort Capital Partners 3 | 2008 | $19.80 | $9.80 | $0.00 | $5.00 | -33.1 | -38 |
| VantagePoint Capital Partners | VantagePoint CleanTech Partners II | 2008 | $49.50 | $29.70 | $0.00 | $35.40 | 9.1 | 11.7 |
| Virgin Green Fund | Virgin Green Fund | 2008 | $19.80 | $19.60 | $0.00 | $8.90 | -24.9 | -8.2 |
| U.S. Renewables Group | USRG Power and Biofuels Fund III | 2009 | $39.60 | $26.00 | $1.50 | $31.40 | 26.6 | -20.4 |
| XPV Capital Corp. | XPV Water Fund | 2010 | $5.00 | $1.80 | $0.20 | $2.00 | 9.6 | -14.4 |
| Source: CalPERS Clean Energy and Technology Fund portfolio report December 2011 | ||||||||
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