NJ sells General Catalyst stake for $14m

The New Jersey Division of Investment has sold its stake in General Catalyst Group VI to the Washington University in St Louis Investment Management Company, according to documents from the state’s September board meeting.

The General Catalyst Group VI stake sold for roughly $14 million, which represents a 5 percent premium to the stake’s net asset value which was $12.7 million as of 31 March 2014. New Jersey initially invested $9.6 million in the fund in January 2012. The state could have invested up to $15 million in the fund, but the investment never reached its maximum allowance, according to a New Jersey spokesperson.

New Jersey was approached by a third party asking the state to sell its fund interest, which represented roughly 5 percent of its venture capital portfolio and less than 1 percent of its private equity portfolio. New Jersey accepted bids from several prospective buyers, with Washington University proposing the highest bid.

“We will redeploy that gain elsewhere for the benefit of plan participants. As we do with all asset classes, we periodically review our positions and buy and sell assets to take advantage of market opportunities,” the spokesperson said.

General Catalyst Group VI is a $500 million, 2011-vintage fund, according to PEI’s Research and Analytics division. The fund has generated a 1.46x net multiple of invested capital and a 37 percent net internal rate of return since inception, according to the New Jersey documents.

General Catalyst makes early-stage and growth equity investments. Select portfolio companies include online accommodations site Airbnb, household services provider Handybook and mobile payment service Venmo, according to its website.

The firm is based in Cambridge, Massachusetts with more than $3 billion under management across seven funds, and was unavailable to comment by press time.

In July, Secondaries Investor revealed New Jersey hasn’t committed to a secondaries fund since 2008. The amount of capital raised globally for secondaries is keeping the state away from secondaries funds because it believes fund managers are forced to pay premium prices in order to deploy surplus capital. The last secondaries fund New Jersey invested in was Partners Group Secondary 2008.