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Fund performance: Uninspiring Hawaii venture portfolio sticks to repeat managers

The Employees’ Retirement System of the State of Hawaii has been a tepid investor in venture capital.

The money manager holds 28 funds from the past decade, four of which were relatively small secondary market purchases of funds it already held.

It favors a small group of managers including New Enterprise Associates, U.S. Venture Partners, Battery Ventures, Canaan Partners and Austin Ventures.

And its commitments are generally cautious. Only six are $8 million or larger and only two are larger than $10 million, according to the agency’s December 2013 portfolio report.

It is no surprise that such a risk-averse approach has produced largely uninspiring results. Canaan Partners’ Canaan VII stands out for its performance, as does the Battery Ventures VIII Side Fund and NEA 11, according to the report. So do a pair of secondary purchases of USVP bubble-era funds made eight or more years after the funds were minted.

But the LP missed breakout funds from new managers, such as Union Square Ventures, Spark Capital and Foundry Group. And it shied away from capitalizing on venture’s move toward small, agile early-stage investors, choosing instead to cling to large and medium-sized funds.

Meanwhile, several funds, including ones from El Dorado Ventures and Oak Investment Partners, have performed poorly.

There are some signs the restraint is easing. The LP stepped up its purchases in 2012 and 2013 by buying into five venture funds. However, it largely stuck with the familiar names of Battery, Canaan and NEA.

The accompanying table lists the funds with their commitments, distributions and investment multiples.