The New York State & Local Retirement System has benefited by doing what many large pension funds don’t: sticking to a smaller fund venture strategy.
In the past dozen years, the public LP in large part has favored early stage funds of $100 million or so and less, and avoided big multi- and late-stage offerings from the likes of New Enterprise Associates and Technology Crossover Ventures.
The results aren’t too bad. In the rising tide of the past several years, returns have improved substantially.
The strategy has meant holding funds from Tribeca Venture Partners, Softbank Capital Partners, Aisling Capital and High Peaks Venture Partners. The LP has Institutional Venture Partners XIII, which at $750 million is one of its largest.
It also holds several funds of funds from such managers as Fairview Capital Partners and it shields many of their holdings from view. These funds of funds have taken positions in larger funds from NEA and other managers, but also have invested in Azure Capital Partners II and DCM IV.
The top performing fund in the portfolio is JP Morgan Direct Venture Capital Institutional Investors III with an investment multiple of 3.59x as of March 2014, according to a pension fund portfolio report. The fund gained nicely in the previous 12 months.
Also performing well is Softbank Capital Technology NY Fund from 2005, which posted a 2.22x multiple as of March, the portfolio report shows. Institutional Venture Partners XIII made strong gains over the 12 months ended in March, as did Aisling Capital III.
One young fund starting well is Tribeca Venture Fund II, vintage 2011.
The accompany table lists the funds with their commitments, market values and multiples, calculated by VCJ.