This seems particular true in venture capital, where tiny funds can boast eye-popping returns that larger funds can only lust after.
One example is the $10 million Athenian Venture Partners III AVP OH Tech I from the difficult investment vintage of 2003. The Ohio-based fund has eight investments and so far one major exit. Other exits are expected, which should lift performance further.
The fund boasts a current IRR of 31% and a net return multiple of 4.95x, according to a press release from fund manger Athenian Venture Partners. That brings it to the top of its class of 38 funds, as calculated by Preqin, the release states.
“I think there definitely is an advantage to being smaller,” says Karl Elderkin, founder and managing partner. “I believe we can participate in deals that might be just below the radar of the other guys.”
The firm, which is based in Ohio, also benefits from the attractive deal pricing available in the middle of the country and the mountain states.
The one significant exit came from Manta Media by way of a $44 million Norwest Venture Partners investment in the company that was announced in April. Elderkin said Athenian sold 20% of its position and holds the rest.
(Article corrected to update name of fund to AVP OH Tech I. Athentian Venture Partners III is a separate fund.)
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