Wellcome Trust, the world's second-largest medical charity and a backer of the Human Genome Project and Alibaba Group Holding, is looking to sell $750 million in venture capital fund stakes as a resurgence of interest in the asset class lifts prices.
The London-based trust hired Cogent Partners to manage the sale of the stakes, said two people with knowledge of the situation, who asked not to be identified because the information is private.
Venture capital accounted for about 8%, or £1.4 billion ($2.4 billion), of the £17.3 billion in trust assets as of Sept. 30. Wellcome Trust's venture capital funds returned 18% for the year ended Sept. 30, according to the firm's 2013 annual report.
Venture capitalists are seeing their best returns since the late 1990s dot-com bubble after 12 venture capital-backed companies went public in the U.S. last year with market capitalizations of more than $1 billion at the time of offering. Alibaba, the Chinese online marketplace, filed this week for an IPO and might raise as much as $20 billion.
“We review our portfolio constantly as part of a normal process of asset management,” according to an e-mailed statement from Mark Henderson, a Wellcome Trust spokesman, who confirmed the Alibaba stake. The trust has written in recent annual reports that it's pursuing a policy of concentrating holdings into fewer, larger positions.
Bill Murphy, a managing director at Cogent, which advises institutional investors on the secondary market, declined to comment. The average high price for venture fund stakes hit 80% of net asset value during the second half of last year, the highest level in more than six years, according to a January report by Cogent. Secondary stakes typically sell at a discount.
