UC Posts Returns on Private Equity Portfolio

The University of California posted performance data for its private-equity portfolio on the Web on Thursday, becoming the latest public institution to disclose such data.

The posting comes after months of legal wrangling.

The institution was sued in April by the San Jose Mercury News, the Coalition of University Employees and a Berkeley professor, who wanted the investment information made public for review.

According to the posting, the net asset value of the institution’s venture and private partnership investments was $700 million on March 31. The portfolio had generated $2.1 billion in profits since 1979. Private-equity investments made up less than 2% of the university’s overall portfolio.

The report reflects the difficulties private-equity investors have experienced in recent years. Investments made in funds from the 1980s and early 1990s generally showed respectable returns.

However, venture funds formed since 1999 have posted significant losses.

Part of this is explained by the nature of venture fund returns. During the first years of a partnership, venture capitalists generally make their investments in start-ups, hoping to reap rewards later in a fund’s life.

But the downturn has caused many to write down these investments, making investment recovery more difficult.

The university also has seen poor performance from its investments in emerging market funds, according to the report.

The disclosure followed a state Superior Court ruling in July that the information had to be released. It was delayed by an appeal by the university to the state Supreme Court. On Sept. 30, the high court decided not to hear the case.