After giving itself room to increase pacing into private equity and venture capital over the next few years, the firm that invests on behalf of Ventura County Employees Retirement Association says it is the right time to scale up allocations.
The $8.7 billion pension has deployed $123.4 million into its combined private equity and venture capital portfolio this year. After a change introduced in April, the system has the flexibility to add $275 million to that portfolio next year and $400 million the year after.
The system’s private equity and venture commitments are overseen by Abbott Capital Management, which the system hired in 2017 – when it had low single-digit exposure to those private assets.
Young Lee, managing director at Abbott, told the system’s board at an October 27 meeting that the remainder of 2025 was full of opportunities in venture as well as buyouts, the system’s primary focus in private equity. Venture Capital Journal watched a live broadcast of that meeting.
The system is examining nine early-stage VC funds and three multi-stage VC funds across its pipeline for the next year, based on the presentation.
“We may not commit to every reinvestment opportunity and will likely find new investment [opportunities],” Lee said. “We will remain disciplined.”
Lee added that many of the system’s venture managers will be fundraising next year, giving them the potential to re-up with trusted GPs.
“We see a strong opportunity pipeline with multiple high-quality firms,” he said. “We’re also seeing distribution uplifts as managers focus in on exits.”
Exit activity in venture is on pace to exceed last year, according to Abbott’s presentation. The firm attributed potential for an even greater turnaround in dealmaking to accommodative debt markets and easing monetary policy.
A bounce-back of distributions over previous years is expected to help the fund balance out the significant amount of capital being drawn out in new commitments. The system is experiencing a J-curve hit from its increased pacing into private assets.
The pension – which has an 18 percent target for PE and VC and an actual allocation of 19 percent – plans on steadily ramping up commitments, according to the presentation. Global venture capital and growth equity is expected to make up between 10 and 30 percent of that allocation.
Matthew Smith, another managing director at Abbott, told the board he anticipates an uptick in VC fundraising next year. Pricing of venture assets is also picking up, he said.
The venture industry is in its third year of a fundraising downturn. The slowdown continued into the third quarter of this year, with global VCs posting the lowest quarterly figures since Q4 2015, according to VCJ research.
Ventura County’s most recent commitments include $8 million for the US tech-focused Drive Capital Fund V and $12 million for Drive Capital Overdrive Fund III. The system committed the same amounts to the previous iterations of those Drive Capital funds.
In the past year, Ventura County also made a $11.4 million commitment to CRV XX, the latest fund from Palo Alto-based venture capital firm CRV, which invests in early-stage enterprise and consumer start-ups.
Ventura County has been a consistent investor in the funds of Boston-based firm Battery Ventures since 2018.