Fund performance: Sticking with mid-sized venture bets bring LP rewards

Mid-sized venture funds may be fewer in number, but returns haven’t disappeared from some LP’s portfolios.

Seven of the top 10 funds in the California State Teachers’ Retirement System’s current venture portfolio are funds in the mid tier of venture. Returns from some are pretty extraordinary.

OrbiMed Advisors’ fourth fund from 2010 boasted an IRR of 68.36 percent as of March 2014, and Sofinnova Ventures’ 2011 eight fund posted a 36.87 percent IRR as of the same date, according to a recent CalSTRS portfolio report.

Institutional Venture Partners’ 12th fund, with a vintage of 2007, also has a spot near the top of the portfolio with an IRR of 31.92 percent, while BlueRun Ventures’ fourth fund from 2008 came in with an IRR of 30.56 percent as of March.

All the funds range in size from $240 million to $600 million, according to data from Thomson Reuters. Two other mid-tier funds—Shasta Ventures II and GGV Capital IV—stand out for posting sizable gains over the 18 months leading up to the report’s data.

The CalSTRS portfolio, and its performance, is evidence that mid-tier venture has not gone away. The money manager has 35 venture funds, and funds of funds, with vintages of 2004 to 2013. Nineteen of them are funds that vary in size from $200 million to $735 million.

Managers, along with the names mentioned above, include Frazier Management, InterWest Partners and DCM.

Overall, the entire CalSTRS venture portfolio is prospering. A total of 23 of the 2004 to 2013 funds had positive IRRs as of March while 12 didn’t. The majority of the funds made performance gains in the previous 18 months.

The accompanying table lists the 35 funds along with capital commitments, distributions and IRRs.