The University of California is boosting performance by cutting fees, revamping its portfolio with the sale of $1 billion of private equity fund stakes including investments with Bessemer Venture Partners and billionaire Wilbur Ross’s WL Ross & Co.

The university, which oversees $98.2 billion in endowment, pension and other assets, made portfolio cuts totaling $10 billion and saw returns improve in the fiscal year ended June 30 as a result, officials said. The private-equity stakes were sold ahead of schedule on the secondary market rather than held until after the funds’ lock-up period expired.

The overhaul has been led by Jagdeep Singh Bachher, former executive vice president of venture and innovation at the Alberta Investment Management Corp. who took over as the chief investment officer of the 10-campus state system in April 2014.

Slashing Fees

“He’s convinced us that in a lower-return environment the fees are more important,” Daniel Hare, a faculty representative on the investment committee overseeing the University of California endowment, said in an interview. “Many of the things he’s done were things that were hoped for when he was hired.”

The $283.9 billion California Public Employees’ Retirement System has similarly sought to slash fees by reducing the number of managers in its private-equity portfolio while schools such as Columbia University have unloaded alternative assets before they mature.

The $1 billion of private funds were sold in the fiscal year ended June 30, according to the University of California. Bloomberg identified the names of most of those funds, with a combined value of almost $600 million, using the university’s quarterly performance reports through March 31, the latest available. Buyout and venture capital funds sold by the school dated back to 1999 and had net asset values as small as $1.2 million.

Most of the funds had positive annualized returns after fees, where the data was made available. The highest gain, at 35.8 percent, came from Bluerun Ventures IV, a partnership from 2008.

Redpoint, Polaris

Other funds sold included those managed by Menlo Park, California-based Redpoint Management; Intersouth Partners in Durham, North Carolina; and Polaris Venture Partners in Boston, according to the data. Among more recent vintages was Bessemer Venture Partners VIII, a fund from 2011 run by the Larchmont, New York-based company. The university’s stake had a net asset value of $16.2 million at the time it was sold.

Ross’s WLR Recovery Fund V and IV and two funds run by New York-based Lindsay Goldberg & Co. also exited the university’s endowment.

Dianne Klein, a university spokeswoman, confirmed the sales.

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