MassPRIM continues to enjoy healthy VC fund performance

Spark, Union Square and Flagship lead the way.

The $71.8 billion Massachusetts Pension Reserves Investment Management Board continues to be rewarded for its highly developed venture capital program.

The pension plan’s latest performance results show that about 80 percent of venture funds in the 2006 to 2015 vintages have double digit IRRs and 100 percent of the funds in the time period registered positive returns.

For the funds in the vintage years 2006 to 2008, Spark Capital’s second fund was the strongest performer, according to a portfolio report with data through Mar. 31.

The Boston-based firm’s breakout fund produced an IRR of 51.7 percent. It was an early investor in Twitter, which went public in 2013, as well as Tumblr, a blogging platform purchased by Yahoo for $1.1 billion in 2013.

In the 2009 to 2012 timeframe, MassPRIM’s bet on Union Square Ventures’ first opportunity fund returned an IRR of 58.7 percent. The New York firm’s fund had several hits, including Twitter and Zynga, a games company that launched an IPO in 2011.

While Union Square Ventures led the 2009 to 2012 vintages in regards to IRR, Flagship Ventures’ fourth fund outperformed by a longshot using investment multiples as a performance metric. Flagship, a life sciences-focused venture firm, was a backer of Moderna Therapeutics, a drug discovery company that had a successful IPO in late 2018, which helped the fund get 10.1x on invested capital.

Lastly, for the funds from 2013 to 2015, Flagship Ventures’ fifth fund led performance with a 44.7 percent IRR. The portfolio of early-stage drug discovery companies is performing well.

Venture Capital Journal also reviewed MassPRIM’s commitments to VC funds since 2016. Over this time, the pension fund has re-upped with Union Square Ventures, Technology Crossover Ventures, Spark Capital, Index Ventures and Insight Ventures.

Medicxi, a biosciences venture firm that spun out of Index Ventures, was the only new firm added to the portfolio.

MassPRIM’s total private equity performance was recently ranked first among 163 U.S. public pension funds based on 10-year performance, according to a recent study by the American Investment Council.

As of June 30, $8.29 billion or 11 percent of the MassPRIM’s total AUMs were allocated to private equity, short of the 12.3 percent target. The PE asset class was by far the strongest performing strategy in the portfolio, returning 18.5 percent, 20.5 percent and 18.3 percent gross of fees over a one-year, three-year and 10-year period.

While the pension fund doesn’t have an official allocation target for venture, MassPRIM holds more than $1.76 billion in VC and growth equity assets, accounting for over 21 percent of PE portfolio.

To download a full version of this results click here: MassPRIM-VC-portfolio-2006-2015

2006 to 2008

Fund Net IRR Net Multiple
Spark Capital II 51.7% 4.3x
Battery Ventures VIII Side Fund 30.2%  *
TCV VII 23.7% 2.9x
Union Square Ventures 2008 20.8% 3.6x
Summit Partners Venture Capital Fund II 19.6% 2.2x
Insight Venture Partners VI 19.1% 2.4x
Battery Ventures VIII 17.6%  *
M/C Venture Partners VI 13.3% 2.1x
TCV VI 13.2% 1.7x
Flagship Ventures Fund 2007 11.7% 1.8x
Menlo Ventures X 11.4% 2.2x
Polaris Venture Partners V 7.6% 1.6x
New Enterprise Associates 12 6.7% 1.4x
Austin Ventures IX 5.1% 1.4x

2009 to 2012

Fund Net IRR Net Multiple
Union Square Ventures Opportunity Fund 58.7% 3.3x
Flagship Ventures Fund IV 52.5% 10.1x
Index Ventures Life VI (Jersey) 37.4%  *
Spark Capital III 31.9% 2.9x
Union Square Ventures 2012 Fund 27.3% 3.3x
Battery Ventures IX 25.9%  *
Sofinnova Venture Partners VIII 25.3% 1.7x
Insight Venture Partners Co-Investment II 25.0% 3.2x
Index Ventures VI (Jersey) 24.8%  *
Polaris Venture Partners VI 24.3% 2.7x
Insight Venture Partners VII 22.4% 2.7x
Rembrandt Venture Partners III 14.8% 1.7x
Index Ventures Growth II (Jersey) 13.7%  *
Institutional Venture Partners XIII 11.9% 1.7x
Ascent Venture Partners V 9.2% 1.5x
Keytone Ventures II 9.2% 1.6x
SV Life Sciences Fund V 8.5% 1.3x
SAIF Partners IV 7.6% 1.5x
Rembrandt Venture Partners II 4.2% 1.2x

2013 to 2015

Fund Net IRR Net Multiple
Flagship Ventures Fund V 44.7% 2.5x
Insight Venture Partners IX 30.1% 2.0x
Battery Ventures X – Side Fund 23.0%  *
Union Square Ventures 2014 20.3% 1.7x
Union Square Ventures Opportunity 2014 18.8% 1.6x
Insight Venture Partners VIII 16.5% 1.9x
Spark Capital IV 15.7% 1.6x
Sofinnova Venture Partners IX 14.3% 1.4x
Spark Capital Growth Fund 12.8% 1.5x
TCV VIII 12.0% 1.5x
Institutional Venture Partners XIV 11.6% 1.5x
Ascent Venture Partners VI 8.7% 1.2x
Battery Ventures X 8.1%  *
Index Ventures VII (Jersey)  *  *
Index Ventures Growth III (Jersey)  *  *
Source: Massachusetts Pension Reserves Investment Management Board portfolio report as of March 31, 2019.
Notes: Data is as of March 31, 2019. And * indicates data in this field has not been disclosed.