Dana Hull covers clean technology and energy policy for the San Jose Mercury News. She often writes about electric vehicles, the smart grid, the solar industry and California energy policy, from RPS goals to Gov. Jerry Brown's big dreams for distributed generation.
CalPERS CIO: Cleantech investing has got an L curve, for Lose
It’s no secret that LPs – the big public pension funds, university endowments and high net worth individuals that typically invest in venture capital funds – are disgruntled with cleantech as a sector.
Now Joseph Dear, CIO of the huge California public employees pension fund known as CalPERS, was particularly blunt about it. He disclosed that CalPER’s Clean Energy & Technology Fund, which took in $465 million, had a -9.75 percent return. (h/t to Katie Fehrenbacher of GigaOm)
The fund’s performance details don’t paint a pretty picture.
“We’re all familiar with the J curve in private equity,” said Dear, who appeared on a panel at the Wall Street Journal’s Eco:nomics conference Wednesday night. “Well for CalPERS, Cleantech investing has got an L curve, for Lose….This has been a noble way to lose money…..Just because its a good idea doesn’t make it a good investment.”
Here’s the clip if you haven’t seen it already:
Dana Hull covers clean technology and energy policy for the San Jose Mercury News. She often writes about electric vehicles, the smart grid, the solar industry and California energy policy, from RPS goals to Gov. Jerry Brown's big dreams for distributed generation.
2 comments
The state of cleantech venture capital: what lies ahead — Tech News and Analysis
[...] Funds focused solely on cleantech will have a longer and deeper “J-curve” of returns compared with VC as a whole. When they reach the same final return multiple, they will take longer to do so (impacting IRR). Midway through the journey, their performance will look like an “L-curve.” [...]
Mar 27, 2013
jOtMe
It’s a good thing that I clicked on the video link, otherwise I would have assumed from the written text that the CIO of CalPers was completely against clean technology investment. Perhaps it would be good to also include his comments on the need for public policy prescriptions and infrastructre to help bolster the clean tech sector so that private capital can come in and help scale and investors can get a return on their investment that is more reflective of the successful growth of clean technologies that we will doubtless see once the appropriate market and policy mechanisms are in place.
Apr 3, 2013