Education

Why One of the World's Largest Pension Funds Turned to Venture

2 min watch

Key Takeaways

  • Mark Machin, CEO of Opto, former head of CPPIB (one of the world's largest pensions) and partner of Goldman Sachs, explains why he pushed CPPIB into a venture allocation.

  • Investors were wary after the dot com bubble of including venture in their portfolios because risk-adjusted returns weren't great and the space was still relatively new and small.

  • That changed and today risk-adjusted returns for venture are very attractive, and the space has grown a lot - leading investors to make bigger allocations.

  • Importantly, portfolios are exposed to the risks that disruption can bring if they're not holding venture capital allocations.

Disclaimers

*Lonsdale Investment Management, LLC (the “Firm”, “we” or “us”) is an SEC-registered investment advisor. Registration with the SEC does not imply a certain level of skill or training. SEC registration does not mean the SEC has approved of the services of the investment adviser.

*Unless otherwise indicated, commentary on this site reflects the personal opinions, viewpoints and analyses of the author and should not be regarded as a description of services provided by the Firm or its affiliates. The opinions expressed here are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual on any security or advisory service. It is only intended to provide education about the financial industry.

*The views reflected in the commentary are subject to change at any time without notice. While all information presented, including from independent sources, is believed to be reliable, such information has not been verified by a third party or independently verified by the Firm or any other person. Neither the Firm, or any of its affiliates, employees or agents assume any responsibility or make any representation or warranty as to accuracy or completeness of such information. We reserve the right to change any part of these materials without notice and assume no obligation to provide updates. Nothing on this site constitutes investment advice, performance data or a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

*An investment in any alternative investment is highly speculative and involves significant risks, including lack of transparency and control. The environment for real estate investments and private fund investments is increasingly volatile and competitive. Investors should only invest therein if they can withstand a total loss of their investment. Past performance is not indicative of future results. No assurance can be given that the performance of unrealized investments has not significantly changed from the date the performance reflected herein was determined.

*The performance discussed herein is based upon investments made by third party fund managers who are unaffiliated with the Firm. It should not be assumed that future investors would experience returns, if any, comparable to those illustrated herein. Past performance is not indicative of future returns. Investment results will fluctuate. Returns are not guaranteed. All investments are subject to the risk of loss, including the loss of principal. No representation is being made that an investment account has, will, or is likely to achieve profits or losses equal to the profits or losses shown. Actual returns will vary greatly and depend on personal and market conditions.

*This information contains certain “forward-looking statements,” which may be identified by the use of such words as “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,” “potential” and other similar terms. Examples of forward-looking statements include, but are not limited to, estimates with respect to financial condition, results of operations, and success or lack of success of the depicted investment strategy. All are subject to various factors, including, but not limited to general and local economic conditions, changing levels of competition within certain industries and markets, changes in interest rates, changes in legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors affecting operations that could cause actual results to differ materially from projected results.