Venture Capital Performance at Dartmouth Endowment

In their latest report, the school highlighted that their venture capital portfolio generated the highest return.

For fiscal year 2019, and for the second year in a row, the Venture Capital portfolio generated the highest return on an absolute and relative basis. For the industry, continued technology innovation, plentiful capital, and a healthy IPO market created a robust valuation environment. Dartmouth’s venture capital managers continue to demonstrate a superior ability to access the best entrepreneurial talent and to add value through their time, expertise, and capital investment.

The Private Equity portfolio generated high double-digit returns for the fiscal year, delivering both strong absolute and benchmark-relative performance results. These returns are driven by skilled investment managers who expertly identify opportunities to add fundamental value in underlying portfolio companies. Recognizing the higher return potential of properly executed private investments, combined with Dartmouth’s long and successful history of investing with world-class private equity and venture capital managers, Dartmouth has intentionally and selectively increased its exposure to private equity and venture capital investments, where the combined 10-year annualized return is 18.3%.

Endowment Report 2019, Dartmouth

What kind of qualities do they look for in a fund manager?

Focus, differentiation, and a clear investment edge. We seek investors with a clearly defined circle of competence and unique capabilities to pursue a given strategy, whether through a differentiated research process, knowledge base, or time horizon.

Keen insights to capitalize on unique opportunities where either capital or competitive advantage in investing is scarce.

A comprehensible strategy with a clear source of return. Understanding the investment thesis and execution is a precondition for investing.

Superior capital allocation skill. We value investors who demonstrate discipline in pursuing their opportunity set, letting fundamentals guide the decision-making process on deploying and harvesting capital.

A sustainable and distinctive organization. The best firms are headed by the best leaders, those who can recruit and retain stellar investment talent while deliberately and thoughtfully building the firm’s culture.

Alignment of interest. We look for firms to be right-sized for the strategy they pursue and for principals to invest their own capital alongside Dartmouth’s.

The endowment paid out $250 million in fiscal year 2019. Coincidentally, the school also celebrated their 250th anniversary in 2019.

Dartmouth 250: Honoring Our Past, Inspiring Our Future

Dartmouth campus with Baker-Berry Library in the foreground.
Twitter @dartmouth

Post by Marcelino Pantoja