Fund performance: UTIMCO slows its venture investing

The University of Texas Investment Management Company has pulled back on its new commitments to venture, even as its recent crop of funds sees a sharp improvement in performance.

UTIMCO, an adventuresome investor in venture, has by and large benefited nicely from the now unfolding venture up-cycle. It bought into 18 funds since the start of 2008 and 10 of them already sport positive IRRs.

Many of these recent funds are standouts. For instance, Union Square Ventures Opportunity Fund from 2010 rises to the top of the list with an IRR of 71.25%, according to the money manager’s most recent portfolio report dated August 2013. IA Ventures Strategies Fund I also shows itself to be a cut above the rest with an IRR of 66.17%, and next on the list are Morgenthaler Venture Partners IX and Union Square Ventures 2008.

Also performing well is the Cendana Co-Investment Fund, an institutional seed fund of funds from 2012, which has a 29.95% IRR.

However, UTIMCO has clearly slowed its purchases of new venture funds. The money manager bought into six funds in 2011, including IA Venture Strategies Fund II, True Ventures II and the Union Square Ventures 2012 Fund.

Since then it has added only three funds: the Cendana Co-Investment Fund and Foundry Venture Capital 2013, both last year, and Foundry Group Select Fund in 2013, its latest portfolio report shows.

It is interesting to note that this slow down comes even as many of UTIMCO’s latest funds show significant improvements in performance. The Union Square Ventures 2012 Fund advanced nicely in the past year, as did Foundry Venture Capital 2010. Sofinnova Venture Partners VIII also gained nicely, when comparing portfolio reports from August 2013 and August 2012.

Even some of the money managers’ funds that haven’t broken into positive territory have gained considerable ground. These include True Ventures III and IA Venture Strategies Fund II.

The entire list of 18 funds is printed in the accompanying table along with their commitments, called capital and IRRs from August 2013 and August 2012.