The University of Texas Investment Management Company’s creative approach to venture continues to pay dividends.
The money manager made bets on such emerging firms as Union Square Ventures, Foundry Group and Spark Capital in the middle of the last decade. Funds from these firms remain its top performers.
Technology Crossover Ventures, ARCH Venture Partners and Sofinnova Ventures also have funds that have done nicely, adding to strong returns from the period.
UTIMCO has positions in 26 venture and growth funds with vintages of 2003 to 2007. As of August, 23 of them had IRRs in positive territory and three had IRRs that were negative, according to UTIMCO’s most recent public portfolio report.
The funds from Union Square Ventures, Foundry Group and Spark Capital have clearly outperformed, even though they have pulled back a bit in the past couple years. Union Square Ventures 2004, the top fund, boasts an IRR of 65.59% and, as of August, returned $135.9 million in distributions on an investment of $22.3 million, according to the portfolio report. Its IRR from November 2011 was 79.47%
Second on the list is Spark Capital II with an internal rate of return of 42.35% and $20.2 million in distributions. In November 2011, its IRR was 70.88%.
The third best performing fund, Foundry Venture Capital 2007, also has a strong record of distributions – $58.2 million on an investment of $39 million – and an IRR of 40.23%. Its IRR from November 2011 was 66.9%.
Rouding out the top 10 are two funds from Arch Venture Partners, three from Technology Crossover Ventures, one from Sofinnova Ventures and one from Pinto Technology Ventures.
Two funds from Intellectual Ventures rank at the bottom of the list. Invention Development Fund I from 2007, the worst performing fund, had an IRR of -51.9% as of August, which represented an improvement from November 2011.
The accompanying table lists the 26 funds along with their commitments, called capital, distributions and IRRs.