The California Public Employees’ Retirement System’s Sacramento Private Equity Partners portfolio shows the challenges of modern day venture.
The portfolio’s venture funds are largely in the black. More have positive IRRs than negative ones. But the median IRR is -4.2%, suggesting some difficulties navigating an exit-starved environment, according to a VCJ analysis of CalPERS’ latest fund performance report.
The Sacramento Private Equity Partners portfolio is a tiny slice of CalPERS’ massive investment holdings and is managed by Oak Hill Investment Management. Oak Hill has marching orders to invest in top venture funds, small- and middle-market buyout, distressed opportunity funds and secondary transactions.
The analysis found 20 venture-related funds in the portfolio with vintages of 2006 to 2011, including several funds with a balanced or generalist’s approach. They are a well diversified lot with seven targeting early stage investing, five looking late stage and four addressing a balanced or generalist’s approach.
The most active year for commitments was 2007, followed by 2010 and 2008, according to the latest performance report updated to September 2011. The youngest of the funds are obviously early in their life cycle and a negative IRR might be expected. But even after backing out funds with vintages of 2009 and more recent, the median IRR remains -2.8%.
Below, we show you the 20 funds from the portfolio with their IRRs, distributions and commitments. Among the most impressive are two Oak Hill Investment Management secondary funds – Secondary Investments 2008-B and Secondary Investments III. Both look to be doing quite well. Also doing well is Emergence Capital Partners II from 2007.
On the other hand, Tallwood III Annex from 2008 is off to a challenging start. So is The Column Group from 2007.
What follows is a rundown on 20 funds from the CalPERS Sacramento Private Equity Partners portfolio.
Third Rock Ventures II
Vintage: 2010
Firm: Third Rock Ventures
Commitment: $7.1 million
Cash In: $1.1 million
Cash Out: 0
Portfolio Value and Cash Out: $860,000
IRR: -40.7%
TauTona Partners
Vintage: 2010
Firm: TauTona Group
Commitment: $4.8 million
Cash In: $1.2 million
Cash Out: 0
Portfolio Value and Cash Out: $797,000
IRR: -38%
Tallwood III Annex
Vintage: 2008
Firm: Tallwood Venture Capital
Commitment: $9.5 million
Cash In: $9.5 million
Cash Out: 0
Portfolio Value and Cash Out: $3.7 million
IRR: -37.9%
OrbiMed Private Investments IV
Vintage: 2010
Firm: OrbiMed Advisors
Commitment: $5.9 million
Cash In: $1.2 million
Cash Out: $37,000
Portfolio Value and Cash Out: $1.2 million
IRR: -10.2%
Meritech Capital Partners IV
Vintage: 2011
Firm: Meritech Capital Partners
Commitment: $4.8 million
Cash In: $929,000
Cash Out: 0
Portfolio Value and Cash Out: $896,000
IRR: -8.7%
The Column Group
Vintage: 2007
Firm: The Column Group
Commitment: $4.8 million
Cash In: $2.6 million
Cash Out: $8,800
Portfolio Value and Cash Out: $2.4 million
IRR: -4.6%
Pinnacle Ventures Equity Fund I-O
Vintage: 2007
Firm: Pinnacle Ventures
Commitment: $7.1 million
Cash In: $5.6 million
Cash Out: $323,000
Portfolio Value and Cash Out: $5.1 million
IRR: -3.3%
Bridgescale Partners
Vintage: 2006
Firm: Bridgescale Partners
Commitment: $7.1 million
Cash In: $6.4 million
Cash Out: $526,000
Portfolio Value and Cash Out: $6.1 million
IRR: -2.2%
Third Rock Ventures
Vintage: 2007
Firm: Third Rock Ventures
Commitment: $4.8 million
Cash In: $2.9 million
Cash Out: $487,000
Portfolio Value and Cash Out: $2.9 million
IRR: 0.6%
DAG Ventures III-QP
Vintage: 2007
Firm: DAG Ventures
Commitment: $39.5 million
Cash In: $28.4 million
Cash Out: $3.1 million
Portfolio Value and Cash Out: $29.2 million
IRR: 0.9%
JMI Equity Fund
Vintage: 2007
Firm: JMI Equity
Commitment: $14.3 million
Cash In: $13.2 million
Cash Out: 0
Portfolio Value and Cash Out: $14.1 million
IRR: 2.7%
Pinnacle Ventures Equity Fund II-O
Vintage: 2008
Firm: Pinnacle Ventures
Commitment: $24.5 million
Cash In: $12.2 million
Cash Out: $3.1 million
Portfolio Value and Cash Out: $12.9 million
IRR: 4%
OHIM Secondary Investors II
Vintage: 2007
Firm: Oak Hill Investment Management
Commitment: $5.4 million
Cash In: $4.9 million
Cash Out: $2.5 million
Portfolio Value and Cash Out: $5.5 million
IRR: 4.2%
TA XI
Vintage: 2010
Firm: TA Associates
Commitment: $9.5 million
Cash In: $2.95 million
Cash Out: 0
Portfolio Value and Cash Out: $3.05 million
IRR: 6.8%
Pinnacle Ventures Debt Fund III
Vintage: 2008
Firm: Pinnacle Ventures
Commitment: $7.1 million
Cash In: $4.3 million
Cash Out: $432,000
Portfolio Value and Cash Out: $5.1 million
IRR: 11.8%
New Enterprise Associates 13
Vintage: 2009
Firm: New Enterprise Associates
Commitment: $4.8 million
Cash In: $2.5 million
Cash Out: $182,000
Portfolio Value and Cash Out: $2.9 million
IRR: 15.3%
Institutional Venture Partners XIII
Vintage: 2010
Firm: Institutional Venture Partners
Commitment: $14.3 million
Cash In: $5 million
Cash Out: 0
Portfolio Value and Cash Out: $5.4 million
IRR: 15.7%
Emergence Capital Partners II
Vintage: 2007
Firm: Emergence Capital Partners
Commitment: $19.5 million
Cash In: $13.1 million
Cash Out: 0
Portfolio Value and Cash Out: $19 million
IRR: 19.8%
OHIM Secondary Investments 2008-B
Vintage: 2008
Firm: Oak Hill Investment Management
Commitment: $2.13 million
Cash In: $2.08 million
Cash Out: $2.5 million
Portfolio Value and Cash Out: $3.2 million
IRR: 26.9%
OHIM Secondary Investors III
Vintage: 2007
Firm: Oak Hill Investment Management
Commitment: $465,000
Cash In: $480,000
Cash Out: $816,000
Portfolio Value and Cash Out: $941,000
IRR: 32.2%