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Venture working capital has been hit heavily by souring macroeconomic conditions over the preceding few old age and it ’s not yet clear how the marketplace downturn affected VC monetary fund performance . But recent datum from the San Francisco Employees ’ Retirement System ( SFERS ) give us something to chew on .
SFERS ’s venture portfolio recorded a-.9 % home charge per unit of takings last yearthrough the third quarter , consort to data from the pension fund ’s May 8 meeting . The datum also highlighted that the venture portfolio recorded a 48.8 % IRR in 2021 and -19.9 % return in 2022 .
It ’s crucial to think that these physical body include all the venture funds in the portfolio regardless of where they are in their lifecycle and admit funds that are still deploying Das Kapital . This think of that bit admit funds that still have money going out and not yet coming in , in addition to funds pass on maturity .
So , what do these numbers enjoin us ? While they do n’t tell us about each stock ’s item-by-item performance , or how funds nearing maturity are doing specifically , these numbers do severalize us that overall fund performance is down . These metrics also tell us that the venture cash in hand reaching due date in SFERS ’s portfolio are not returning Washington at a charge per unit high-pitched enough to overwhelm the losses of the portfolio ’s new investment firm commitment .
compare numeral from 2022 and 2023 to a yr like 2021 is an exercise in comparing anomalies . In a more “ normal ” year for venture , say 2018 , SFERS recorded a 22.3 % IRR . This mean that despite have at least 20 funds still in their investment funds period , concord to TechCrunch appraisal , the overall performance of the funds reaching maturity was middling solid .
SFERS ’s performance also demonstrate that the diligence may have already remove tilt bottom and is on its means to being back to normal . While the pension fund still report negative IRR in 2023 , -0.9 % is a positive signaling when liken to 2022 ’s -19.9 % .
This data in fussy is worth paying attention to because SFERS is a middling participating speculation LP . The organization has been investing in the asset socio-economic class for a lot longer than many of its pension fund peers and has hoard a respectable $ 3.6 billion venture portfolio that is diversify across emerging and lay down managers , stage and vintage twelvemonth .
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SFERS is a longtime backer of large - name managers . For example , the pension fund has invested more than $ 273 million into Notable Capital , $ 250 million in NEA finances and $ 69 million in Mayfield in the last decade , among many others .
The recent carrying out has n’t deter the pension from investing into the asset socio-economic class , either . The pension investment firm made 15 commitment to venture funds in 2023 and has made two consignment so far this year , including a $ 75 million committedness into IVP XVIII and a $ 40 million commitment to Volition Capital Fund V.
So while speculation funds do n’t seem on the track to knock it out of the park this yr in terms of carrying into action , the bad of the downturn ’s effects may already be behind us .
