Key Takeaways
- • Half of 20 Sequoia Capital funds in which UC Investments has committed capital since 2018 have posted paper losses, according to public records obtained by Business Insider, marking a rare disclosure of venture fund performance data normally kept confidential.
- • UC Investments deployed $800 million into Sequoia funds since 2018 but has received only $43 million in cash distributions, representing a severely constrained return profile relative to capital deployed.
- • Sequoia's 2018 Global Growth Fund ($8 billion) backed FTX and has failed to return meaningful capital to investors, exemplifying concentration risk in marquee venture vehicles during the crypto downturn.
- • Data as of June 30, 2022 likely understates markdowns, as the filings predate the significant private tech market deterioration in the second half of 2022, suggesting actual valuations have declined further since measurement.
- • This disclosure exposes the opacity of venture capital returns, as VC funds are not required to report performance metrics to regulators, making institutional LP access to performance data exceptionally rare.
Summary
The University of California's $28 billion endowment has experienced significant underperformance in its Sequoia Capital portfolio, with half of the 20 Sequoia funds in which it has invested since 2018 posting losses. According to documents obtained through a public-records request, UC Investments—the office managing the university system's investment funds—has deployed over $800 million into Sequoia vehicles while receiving only $43 million in cash distributions, illustrating the challenging return environment for both the storied venture firm and its limited partners.
The data, current as of June 30, 2022, reveals that ten of the Sequoia funds backed by UC Investments have been marked down in value on paper. Notably, Sequoia's massive 2018 Global Growth Fund, which carried an $8 billion commitment and invested in the failed crypto exchange FTX, has failed to return meaningful amounts of capital. The specific performance metrics underscore the venture sector's broader challenges following the speculative excesses of 2020 and 2021, when private market valuations reached historically elevated levels.
This disclosure is noteworthy because venture capital fund performance remains among the most opaque sectors in institutional finance. Unlike traditional asset managers, venture firms are not required to report returns to regulators or investors in standardized formats, making direct performance comparisons and accountability mechanisms largely absent from the industry. The University of California's willingness to share this data via public records provides rare transparency into the actual performance of one of the world's most prestigious venture franchises.
The timing of the data—fixed at mid-2022—understates the current magnitude of markdowns, as private technology markets experienced pronounced deterioration in the second half of 2022. Venture-backed companies have subsequently raised capital at substantially lower valuations than those achieved in 2020 and 2021, forcing funds to revalue holdings downward. Both Sequoia Capital and UC Investments declined to comment on the findings.
The data, current as of June 30, 2022, reveals that ten of the Sequoia funds backed by UC Investments have been marked down in value on paper. Notably, Sequoia's massive 2018 Global Growth Fund, which carried an $8 billion commitment and invested in the failed crypto exchange FTX, has failed to return meaningful amounts of capital. The specific performance metrics underscore the venture sector's broader challenges following the speculative excesses of 2020 and 2021, when private market valuations reached historically elevated levels.
This disclosure is noteworthy because venture capital fund performance remains among the most opaque sectors in institutional finance. Unlike traditional asset managers, venture firms are not required to report returns to regulators or investors in standardized formats, making direct performance comparisons and accountability mechanisms largely absent from the industry. The University of California's willingness to share this data via public records provides rare transparency into the actual performance of one of the world's most prestigious venture franchises.
The timing of the data—fixed at mid-2022—understates the current magnitude of markdowns, as private technology markets experienced pronounced deterioration in the second half of 2022. Venture-backed companies have subsequently raised capital at substantially lower valuations than those achieved in 2020 and 2021, forcing funds to revalue holdings downward. Both Sequoia Capital and UC Investments declined to comment on the findings.
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