Not All VC Funds are Equal

An interesting article in the New York Times today ("Pension Fund Managers Come Knocking, in Vain," C7) discusses the results of a sudy by Focus Ventures regarding returns among venture capital (VC) funds during the periods between 1983-1987 (the "PC Boom") and 1997-2001 (the "dot com boom"). According to the Times, during the period between 1983-87 the top 50 VC firms (13% of the total) generated 44% of the returns by VC funds. During the period between 1997-2001 the top 50 VC firms (4% of the total) generated 66% of all returns by VC funds. The article also discusses the difficulties state pension fund managers are having in finding VC funds within the top 50 to take their money and that some states mandate that a portion of pension fund assets be invested with VC funds.