The Difficult Decade

The Colorado Public Employees’ Retirement Association has been a steady investor in venture funds and balanced funds that make venture style investments.

Unfortunately, the portfolio’s returns reflect what many GPs already know: The past decade has been a difficult one for venture returns.

Results have been mixed, with many more funds sporting negative IRRs than positive, according to a VCJ analysis of the pension fund’s public investment data.

Colorado PERA, the nation’s 21st largest public pension fund, has 70 venture and venture-style funds in its portfolio. Ten funds included in the total were added to the books in 2010 with the merger of the Denver Public Schools Retirement System.

Overall, Colorado PERA assets were $38.7 billion as of the end of December with 9.3% of them in alternative investments.

The IRR for its alternative investments portfolio is 10.41%.

The Colorado money manager made eight venture investments in 2000, with commitments of $228 million. In the eight years since, it invested in an average of two to five funds a year, with average annual commitments of $79 million, the analysis finds.

Returns from 1999 to 2008 show 25 funds with negative IRRs and 14 with positive results, according to the analysis. It is the reverse for pre 1999, as 19 funds are in positive territory while only two have negative IRRs.

One stand out in the portfolio is Technology Crossover Ventures. Colorado PERA holds six TCV funds with vintages from 1995 to 2010. Results have been solid, as shown below.

What follows is a listing of Colorado PERA funds from 2001 to 2008, including the six TCV funds with their IRRs.