SCERS re-ups with Summit following strong overall VC performance

The California pension, whose venture portfolio returned 21.27 percent in Q4 2019, committed $20 million to Summit Partners Venture Capital Fund V.

The Sacramento County Employees’ Retirement System (SCERS) continues to see its venture commitments shine brightly as its VC portfolio grows.

The California pension announced a $20 million commitment to Summit Partners Venture Capital Fund V and disclosed positive Q4 2019 performance data at its June board meeting.

Summit’s Fund V is targeting $900 million to invest in companies that sit in between the early and growth stages in areas such as life sciences, cybersecurity and next-generation retail, among others, as previously reported by the Venture Capital Journal. SCERS committed to the fund in May.

Fund V has already grabbed over $100 million in commitments, including $25 million from the Teachers’ Retirement System of Louisiana, $45 million from the Maine Public Employees Retirement Fund and $8 million from the Merced County Employees Retirement Association.

SCERS has invested in multiple other vehicles managed by Summit Partners, including a $35 million commitment to Summit Partners Venture Capital Fund IV and a $16.35 million commitment to Summit Partners Venture Capital III.

The commitment to Fund V isn’t surprising given the performance of Summit’s previous two venture funds. At the end of last year, Summit’s third venture vehicle posted a net IRR of 17.31 percent and a TVPI of 1.9x, according to SCERS Q4 performance data. Fund IV saw a 39.22 percent net IRR and a 1.66x TVPI, making it the highest returning 2014 vintage private equity fund for the pension at that time.

Overall, venture has performed strongly for SCERS. The strategy clocked the second highest return in the private equity portfolio with a 21.27 percent net IRR and the highest TVPI metric with 1.79x.

Spectrum Equity Investors VII, which posted a net IRR of 42.71 percent, and Trinity Ventures XII, which posted a 32.03 percent net IRR, were the pension’s top funds in 2019.

Venture currently makes up 37 percent of SCERS’ private equity strategy and is worth approximately $325 million. The private equity bucket is 9 percent of the overall pension portfolio and is worth $1.68 billion.

The Sacramento County Employees’ Retirement System was founded in 1941 and serves more than 28,6000 members. The fund has more than $9.5 billion in assets under management and produced a 2019 gross return of 17.2 percent.