Tennessee Consolidated Retirement System (TCRS) made its first venture commitment of 2020 in early March, just before shelter-in-place rules went into effect nationwide.

The Nashville-based pension plan committed $150 million to General Catalyst’s latest series of funds. The re-up was agreed on March 4 and the Boston firm announced on March 31 that it secured $2.3 billion in commitments across three strategies: a $600 million early-stage fund, a $1 billion growth venture fund and a $700 million “endurance fund” for investing in companies doing more than $100 million in sales. 

This is the fourth General Catalyst fund backed by TCRS. The funds have been top quartile performers, said director of private equity Daniel Crews at the March 4 meeting.

Other public pensions that invested in General Catalyst are Maine Public Employees Retirement System and State Teachers Retirement System of Ohio, which committed $75 million each. General Catalyst received commitments from 133 investors for each of the three strategies, according to regulatory documents.

The Tennessee pension fund has had a successful venture program since 2009. It has relationships with 13 venture firms, including Khosla Ventures, OrbiMed Advisors and Lightspeed Venture Partners.

In 2019, TCRS committed $40 million to Drive Capital and $100 million to New Enterprise Associate’s $3.6 billion 17th fund.

Although returns have been strong, a large part of the pension plan’s venture portfolio is still unrealized, Crews told Venture Capital Journal in August. “A unicorn’s value can always go down to zero,” he said warning not to get too excited about paper returns.

This cautious view may serve the fund well in the current economic climate.

The pension plan’s total AUMs were $48.1 billion on March 25, 2020, down from $55.2 billion at the end of 2019, according to TCRS Board of Trustees March 27 meeting, which was held via Zoom.

LP Michael Brakebill Tennessee

Most of the decline was in public equities portfolio, which cratered amid broader market selldown as a result of the covid-19 epidemic. “We also anticipate a decline in alternatives and PE strategies values based on current events, but those take a long time to filter through the system,” said chief investment officer Michael Brakebill.

He said that TCRS is currently evaluating a rebalancing strategy.

“We are moving from one of the very best times in the fund to one of the most difficult,” Brakebill said.