CFA Society New York’s Alternative Investments Group hosted our Venture Capital Conference: Perspectives from VCs and Allocators on May 23, with nearly 100 registered attendees.
Keynote speaker Joseph Dowling, Chief Investment Officer of Brown University, was introduced by Group Chair Mark Sullivan, CFA, Managing Director and Partner of Stonehaven. Venture capital panelists included: Christopher Dawe, Co-Head of Venture Capital and Growth Equity at Goldman Sachs Investment Partners; John Frankel, Founding Partner of ff Venture Capital; and Alex Zisson, Managing Director of H.I.G. Capital.
Venture capital (VC) has been a top performing asset class over the long run: venture capital returns have often outperformed public market indices. US venture capital generated 13.2% IRR over the past five years and 25.8% IRR over the past 25 years, according to Cambridge Associates.
Brown University CIO Joe Dowling oversees a $3.4 billion endowment, including investments in venture capital funds. Joe provided an overview of the venture capital ecosystem and the role of venture capital in a portfolio, including long term returns, dispersion of returns, diversification benefits and typical asset allocation for endowments. He also discussed some commonly held misconceptions about investing in venture capital funds and reviewed recent trends in the VC industry, highlighting that manager access and selection are key to a successful venture capital investment program.
Panel moderator Kris Thiessen asked the venture capital panelists to offer their perspectives on how they pick winners, add value and deliver returns.
Christopher Dawe of Goldman Sachs Investment Partners shared some of his experiences making late-stage venture and growth equity investments in media, internet and consumer companies, having invested more than $3.5 billion in private capital transactions, including in two of the largest private internet investments globally.
Alex Zisson of H.I.G. Capital discussed his experiences as venture capital and growth equity investor in biopharmaceutical, medical device and diagnostics companies, drawing upon his background as a top-ranked healthcare sell-side research analyst.
John Frankel of ff Venture Capital shared his experience as a seed- and early-stage investor in technology companies across emerging industries, having led investments in more than 80 companies and served on more than 35 Boards of Directors.
Each of the panelists commented on their current focus areas, investment selection process, lessons learned, their career path into venture capital, evolution of their investment philosophy, alternative funding sources, how they help their portfolio companies grow and capital markets expectations.
Over the coming year, each of the panelists expect both valuations and IPOs to be stable or increase in their respective investment universe, particularly given the large amount of capital (dry powder) which has been raised by venture capitalists.
Kris Thiessen, CFA, CAIA, EA (Helix Management) & Carole Crawford, CFA (fincap360).