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LP Scorecard: CalPERS Funds of Funds Produce Top Performers

These are California Emerging Ventures’s commitments to the 1999 vintage Clearstone Venture Partners I-B LP, which posted an IRR of 154.7 percent and a vintage fund that is some 12 years younger—the 2011 Monomoy Capital Partners II LP backed by Sacramento Private Equity Partners, which posted a 116.3 percent IRR.I

In this, our latest LP scorecard feature, Buyouts takes a look at the top ten investments by IRR through March 31 made through the pension fund’s underlying funds of funds, which span vintages from 1991 to 2012 (see list below).

CalPERS’ funds of funds vehicles are all captive and encompass a broad spectrum of global private equity funds, with a high proportion of these commitments focused on traditional venture capital funds as well as buyout, emerging markets, clean tech, energy and special situations funds.

Out of CalPERS’s funds-of-funds commitments, the 2006 vintage California Emerging Ventures IV LLC is CalPERS’s top performer, posting an IRR of 12.6 percent. Top performers within this portfolio include the Clearstone Venture Partners I-B LP, KPS Special Situations Fund II (A) LP which posted a 55.6 percent IRR; Lime Rock Partners II LP with a 54.8 percent IRR and Rhone Partners II LP, which posted an IRR of 43 percent for the period.

The California Emerging Ventures program was born in 1998 when CalPERS conducted a search for an adviser to manage a program to expand its access to venture capital funds. Grove Street Advisors was selected through a competitive process to manage the program, which has expanded to include four funds. The program’s remit was also subsequently broadened to include a full range of private equity funds.

IRRs for the rest of the fund-of-funds vehicles in the portfolio are as follows: 57 Stars Global Opportunities Fund, LLC (8.7 percent); 57 Stars Global Opportunities Fund 2 LLC (5 percent); California Emerging Ventures I (4 percent), California Emerging Ventures II (3.8 percent), California Emerging Ventures III (6.9 percent); Capital Link Fund I (9.1 percent) and Capital Link Fund II (3.4 percent); Clean Energy & Technology Fund, LLC (-9.5 percent); EM Alternatives (8 percent); Golden State Investment Fund (3.1 percent); and SacramentoPrivate Equity Partners (1.5 percent).

Since inception in 1990 to March 31, 2012, the CalPERS private equity program has generated $20.7 billion in profits for the pension fund. The pension fund has a target allocation of 14 percent as of July 201,1 and an actual allocation of 14 percent (actual investment $33.5 billion) percent as of August 31, 2012.

Altogether CalPERS has committed to 277 funds directly, including its fund-of-funds vehicles, spanning vintages 1991 to 2012. Through these vehicles, the pension fund is indirectly committed to a further 396 funds. According to CalPERS, investments can be in any industry or geography and may include buyouts or corporate restructuring; expansion capital; venture capital; credit related and opportunistic investments. Within its private equity portfolio the sub-asset class allocation targets are as follows: buyouts 60 percent; credit-related 15 percent; venture capital 1 percent; growth/expansion 15 percent; opportunistic 10 percent.

Click here for CalPERS PE Program Fund Performance Review, as of March 31, 2012 and scroll down to see what top ten funds are boosting CalPERS performance from within its funds-of-funds portfolio.

 

10. Clearlake Capital Partners II LP Supp
Vintage: 2010
IRR: 45.6 percent
Multiple: 1.5x
CalPERS funds of funds invested: Capital Link Fund

9. GSR Ventures III
Vintage: 2008
IRR: 46 percent
Multiple: 1.8x
CalPERS funds of funds invested: 57 Stars Global Opportunities Fund

8. Katahdin 2009-A LP
Vintage: 2009
IRR: 49.6 percent
Multiple: 2.5x
CalPERS funds of funds invested: Sacramento Private Equity Partners

7. Lime Rock Partners II LP
Vintage: 2003
IRR: 54.8 percent
Multiple: 3.2x
CalPERS fund of funds invested: California Emerging Ventures

6. KPS Special Situations Fund II (A) LP
Vintage: 2003
IRR: 55.6 percent
Multiple: 3.8x
CalPERS’ fund of funds invested: California Emerging Ventures

5. Foundry Venture Capital 2007 LP
Vintage: 2007
IRR: 57.6 percent
Multiple: 3.2x
CalPERS funds of funds invested: California Emerging Ventures

4. White Deer Energy L.P.
Vintage: 2010
IRR: 58.9 percent
Multiple: 1.5x
CalPERS funds of funds invested: Sacramento Private Equity Partners

3. Avalon Ventures VIII, L.P.
Vintage: 2007
IRR: 89.4 percent
Multiple: 4.3x
CalPERS funds of funds invested: California Emerging Ventures

2. Monomoy Capital Partners II, L.P.
Vintage: 2011
IRR: 116.3 percent
Multiple: 3.6x
CalPERS’ Funds-of-funds invested: Sacramento Private Equity Partners
Vintage: 2006
Funds-of-funds IRR: 1.5 per cent
Funds-of-funds Multiple: 1x

 

1. Clearstone Venture Partners I-B, L.P.
Vintage: 1999
IRR: 154.7 percent
Multiple: 2.8x
CalPERS funds of funds invested: California Emerging Ventures