In the opaque and secretive world of venture capital, performance can be hard to gauge. Funds often keep their returns close to the chest—only disclosing them to their own investors (limited partners, or LPs) and making it difficult to compare performance from manager to manager without being invested in every fund. PitchBook, a widely-used industry resource on private markets data, wants to capitalize on making it a little easier.
PitchBook just released a set of new tools focused around manager scores, which rank fund managers based on factors including performance, a capital call score (the pace at which they call down funds from their LPs), and distributions (how often fund managers, in turn, return capital to their limited partners). Limited partners “don’t have a lot of quantitative models that help them analyze where their risk parameters” really are, Nizar Tarhuni, vice president of institutional research and editorial at PitchBook, told me. “[It’s] a lot of work for small foundations and endowments.” That’s particularly tricky at a time when LPs are being more judicious with their cash as exits—like public listings or acquisitions that return money to LPs—are harder to come by.
According to PitchBook’s manager score rankings, Union Square Ventures, the New York-based VC firm cofounded by Fred Wilson, took two of the top three rankings (with their late stage fund strategy and their early-stage venture strategy ranking number one and number three, respectively). Emergence Capital Partners Fund ranked second, and IA Venture Strategies Fund I ranked fourth. The three firms did not respond to Coins2Day’s request for comment by press time.
PitchBook’s founder and CEO John Gabbert says they pull data from a variety of sources, including filings, press releases, disclosures, FOIA requests, and even from LPs and fund managers (GPs) themselves. Gabbert and Tarhuni say they hope the new tools will enable LPs to be better equipped to make decisions about where to put their money. Using historical cash flow data, “We have the ability to look at a fund and say, ‘Listen, this is how fast they’re deploying capital, here’s how fast they’re returning it.’ And we can score that on a relative basis relative to other firms in that fund family,” Tarhuni says.
Notably, the new offerings fit into what I sense is a bit of a shift for PitchBook itself: The company seems eager to move past being largely known as a go-to place for all private deals, and to become more of a Morningstar-type resource for the decision makers—those folks with the serious money (Morningstar, which focuses on public markets, acquired PitchBook in 2016).
“I think many people in the marketplace view PitchBook as a deal database,” Gabbert told me. But this is “another step on our strategic roadmap to better equip LPs [and] capital allocators,” he says. Gabbert said that PitchBook has had a “50%-plus” compound annual growth rate over the last 10 years. “We think that this LP market is another big one for us to continue that growth rate,” he said, adding that they are “working on better communicating the types of solutions we have for asset managers.”
The CEO told me he also hopes PitchBook’s offerings will provide more transparency for the industry—in lieu of regulations from the Securities and Exchange Commission. Of course, transparency isn’t free: “We’re still in the for-profit mode,” he said.
See you tomorrow,
Anne Sraders
Twitter: @AnneSraders
Email: [email protected]
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Joe Abrams curated the deals section of today’s newsletter.
VENTURE DEALS
- H55, a Sion, Switzerland-based provider of electric propulsion devices for the aviation industry, raised 45 million Swiss francs ($49.3 million) from ND Capital, Tippet Venture Partners, RTX Ventures, and others.
- Pexapark, a Zurich, Switzerland-based market intelligence, software, and advisory services provider for renewable energy companies, raised $21 million in Series C funding. Telstra Ventures led the round and was joined by Swisscom Ventures and the A&G Energy Transition Tech Fund.
- Mundi, a New York City-based platform designed for companies to make efficient international payments, raised $15 million in a Series A extension. Haymaker Ventures led the round and was joined by Union Square Ventures, GMO Ventures, Upper90, Colibri Ventures, Base10, Asymmetric Capital Partners, Gaingels, Mana Ventures, and GSBackers.
- XL8, a San Jose, Calif.-based AI platform that translates media content into different languages, raised $7.5 million in Series A funding. KB Investment led the round and was joined by Atinum Investment.
- FlexPoint, a Minnetonka, Minn.-based automatic billing and payment platform, raised $2.4 million in funding. Garuda Ventures led the round and was joined by Far Out Ventures, Techstars, Cascade Seed Fund, Lorimer Ventures, and others.
- TeachMe.To, a San Diego, Calif.-based platform that connects sports players with local coaches for lessons, raised $2 million in seed funding. 1984 Ventures led the round and was joined by Common Metal, Alumni Ventures, and angel investors.
PRIVATE EQUITY
- Medical Specialists of the Palm Beaches, backed by Ascend Partners, acquired Metzger Comprehensive Care, a Boca Raton, Fla.-based medical practice where patients pay an annual fee for on-demand medical service. Financial terms were not disclosed.
- Trimlite, a portfolio company of Wynnchurch Capital, acquired Francis-Schulze Company, a Russia, Ohio-based distributor of building materials to lumber dealers and door specialists. Financial terms were not disclosed.
EXITS
- ATS Corporation agreed to acquire Avidity Science, a Waterford, Wisc.-based designer and manufacturer of automated water purification systems for the life science and biomedical fields, for $195 million from ShoreView Industries.
- Actionstep, backed by Serent Capital, acquired Soluno, a Toronto, Canada-based accounting software platform for law firms, from AffiniPay. Financial terms were not disclosed.
- Brightstar Capital Partners, Claure Group, and Eldridge agreed to acquire a majority stake in Ausenco, a South Brisbane, Australia-based provider of project management services for mining operations, from Resource Capital Funds. Financial terms were not disclosed.
FUNDS + FUNDS OF FUNDS
- Dawn Capital, a London, U.K.-based venture capital firm, raised $620 million in its fifth fund focused on B2B software companies.
- FUSE, a Seattle, Wash.-based venture capital firm, raised $250 million for its second fund focused on AI-enabled startups and software developers.
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