Gain Access to Premier Early-Stage Venture Funds
The Knightsbridge venture program is distinguished by its focus on venture partnerships that invest in technology and life science-based companies at the seed and early stages of a private company’s life.
Compared to other segments of private equity, venture is a relatively small asset class, so the best managers tend to be highly access-restricted.
The venture industry is also differentiated from most other investment sectors in that manager performance is characterized by persistence, i.e., top-performing venture managers have a high probability of future outperformance [1]. As such, skilled manager selection and concentrated access to premier venture capitalists are critical elements of a successful venture program. We believe Knightsbridge has successfully identified (and continues to identify) leading managers and has built (builds) relationships with firms that, today or in the future, represent the established premier venture franchises.
[1] Based on research by Steve Kaplan and Antoinette Schoar, Private Equity Performance: Returns, Persistence, and Capital Flows.
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Practicing Selectivity
Knightsbridge has a concentrated and balanced portfolio tightly focused on the hardest-to-access, typically invitation-only, venture funds. Knightsbridge consistently practices fund-size discipline, raising only the amount of capital that can be expected to be invested in partnerships of premier venture capitalists. The Knightsbridge team also has the network and skill set to find and evaluate those up-and-coming venture franchises that have strong potential to become part of the established top quartile.
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Providing Vintage Year Diversification
Knightsbridge funds typically invest over multiple vintages (typically three to four years). By investing over multiple years, Knightsbridge is able to gain exposure to a broader set of companies and mitigate exposure to lower-performing years. In addition, Knightsbridge believes that successfully adhering to time commitments in a venture investment program is very difficult, given the length of the venture investment cycle.
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Reducing the Burdens of Starting and Maintaining an Impactful Venture Program
Knightsbridge acts as an extension of its limited partners’ investment teams, allowing them to avoid the added expertise, travel, due diligence, and networking required to build and maintain a venture capital program. Knightsbridge also offers custom separately managed accounts to suit individual limited partner investment program needs. The Knightsbridge back office team is also able to adjust reporting to suit individual limited partner requirements.
Knightsbridge has also invested selectively in non-early-stage venture partnerships for over four decades. These opportunities typically have attractive investment returns comparable to early-stage venture capital funds.
Growth equity funds targeted by Knightsbridge will typically invest higher amounts in companies with lower downside risk and shorter holding periods. Additionally, growth equity financing often has downside protections such as convertible and participating preferred securities.