If you want more proof that venture capital portfolios continue to increase in value, look to the University of Texas Investment Management Co.’s investment portfolio.
Four of its 12 funds with 2010 and 2011 vintages show significant improvement in asset value in the nine months from late 2011 to August 2012, according to UTIMCO’s latest portfolio report. These improvements are reflected in big boosts in IRRs. Only one fund does not show a gain.
Five of the funds from these very recent vintages are so young they didn’t have earlier IRRs, so a comparison is impossible to make. Two of the funds are essentially unchanged during the time period.
Some of the UTIMCO holdings from the two vintage years are promising funds. Union Square Ventures’ 2010 Opportunity Fund had an IRR of 60.33% as of August and a nice advance from November of 2011.
Artiman Ventures’ Special Opportunity Fund, from 2011, and Foundry Group’s Venture Capital 2010 also made solid leaps forward. Artiman Ventures III improved handily as well, though the IRR of this 2010 fund is still a negative number.
It is of course foolish to draw too many conclusions from an IRR so early in a fund’s life. None of the funds, for instance, have returned any cash. But clearly fund managers saw cause for hope in their portfolio companies well into the summer following the botched Facebook IPO.
In the accompanying chart, we list UTIMCO’s venture capital funds from 2010 and 2011 along with called capital and IRRs from August 2012 and November 2011.