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Bottled Up Liquidity: Ten Cal Regents Funds With High Portfolio Values And Often Low Liquidity (Slideshow)

The venture industry has suffered for more than a decade from intractable roadblocks to portfolio company liquidity.

This strategic difficulty is evident in the alternative investments holdings of the University of California, where the Regents have invested in 84 venture funds, 20 between the years of 2001 and 2004.

We took a look at the four vintage years to gauge the depth of the problem. According to the analysis, it remains substantial.

The Regents’ funds run the gamut from early to late stage and from large to small, though the bias is toward smaller, early-stage funds. Five have existing portfolio values that are greater than contributed cash (the funds’ current net asset values are updated through December 2010). This is a big advantage if portfolio companies find attractive exits. So far, cash returns from a number of the funds are negligible.

Another five funds have portfolio values of 70% or more of invested capital, including two from 2001 and two from 2002. By this time in the life of these decade-old funds, they should be winding down operations and pushing out cash.

Instead, exit markets remain bottled up. This year’s promising IPO market, for example, has been stalled by the public market turmoil.

To be fair, the funds in the peHUB sample from 2004 have several more years to prove themselves. So we don’t mean to be too critical of substantial portfolios. If the stated value reflects the true value of the assets and partners can find opportunities for liquidity, hats off to them.

What follows is a slideshow of the 10 funds in the Regents portfolio from 2001 to 2004 with the greatest net asset value to cash contributed (least to most). As always leave your comments in the comments section below.

[slideshow]

[slide title=”No. 10: Versant Venture Capital II”]

Vintage: 2001

Firm: Versant Ventures

Stage: Early

Commitment: $30 million

Cap In: $28.4 million

Cap Out: $8.6 million

Portfolio Value (NAV) : $20.1 million

NAV to Cash In: 71%

[slide title=”No. 9: Intersouth Partners VI”]

Vintage: 2002

Firm: Intersouth Partners

Stage: Early

Commitment: $15 million

Cap In: $13.6 million

Cap Out: $4.6 million

Portfolio Value (NAV): $10.9 million

NAV to Cash In: 80%

[slide title=”No. 8: InterWest Partners IX”]

Vintage: 2004

Firm: InterWest Partners

Stage: Early

Commitment: $40 million

Cap In: $30 million

Cap Out: $2.2 million

Portfolio Value (NAV): $24.7 million

NAV to Cash In: 82%

[slide title=”No. 7: Polaris Venture Partners IV”]

Vintage: 2001

Firm: Polaris Venture Partners

Stage: Balanced

Commitment: $25 million

Cap In: $24.9 million

Cap Out: $6.2 million

Portfolio Value (NAV): $21.5 million

NAV to Cash In: 86%

[slide title=”No. 6: Updata Venture Partners III”]

Vintage: 2004

Firm: Updata Partners

Stage: Balanced

Commitment: $25 million

Cap In: $23.7 million

Cap Out: $2.2 million

Portfolio Value (NAV): $22.9 million

NAV to Cash In: 97%

[slide title=”No. 5: Clearstone Venture Partners III-A”]

Vintage: 2004

Firm: Cleartstone Venture Partners

Stage: Early

Commitment: $20 million

Cap In: $18.4 million

Cap Out: $0

Portfolio Value (NAV): $20.4 million

NAV to Cash In: 111%

[slide title=”No. 4: Darwin Venture Fund of Fund”]

Vintage: 2004

Firm: Darwin Ventures

Stage: Fund of Fund

Commitment: $8.4 million

Cap In: $7.7 million

Cap Out: $226,000

Portfolio Value (NAV): $8.7 million

NAV to Cash In: 113%

[slide title=”No. 3: Granite Global Ventures II”]

Vintage: 2004

Firm: GGV Capital

Stage: Later

Commitment: $25 million

Cap In: $23.9 million

Cap Out: $10.7 million

Portfolio Value (NAV): $28.4 million

NAV to Cash In: 119%

[slide title=”No. 2: DCM Fund IV”]

Vintage: 2004

Firm: DCM

Stage: Early

Commitment: $10 million

Cap In: $9.5 million

Cap Out: $2.3 million

Portfolio Value (NAV): $11.8 million

NAV to Cash In: 124%

[slide title=”No. 1: ARCH Venture Fund VI”]

Vintage: 2004

Firm: ARCH Venture Partners

Stage: Seed

Commitment: $25 million

Cap In: $22.1 million

Cap Out: $883,000

Portfolio Value (NAV): $33.5 million

NAV to Cash In: 152%

[/slideshow]