The backstory here involves Invesco, a prominent investment firm with diverse holdings, including investments in emerging managers in collaboration with CalSTRS. Invesco decided to divest from this particular line of business, which included emerging manager stakes, as it was intertwined with investments in healthcare and private equity funds. These emerging manager stakes were subsequently sold to Sapphire at a discounted rate. A spokesperson from Sapphire characterized this discount as a “de minimus amount for work previously done by Invesco.”
CalSTRS conducted an independent evaluation process before selecting Sapphire as the successor, utilizing Invesco’s decision as an opportunity to reevaluate its own approach to funding emerging managers. According to Rob Ross, a private equity portfolio manager at CalSTRS, “Standardizing one group to focus on venture—because it’s so specialized from an emerging manager standpoint—made a lot of sense for us.”
A significant portion of the $1.4 billion in funds now managed by Sapphire has already been allocated. However, Sapphire has plans to invest approximately $100 million annually over the next three to four years, with this capital not necessarily needing to be reinvested in the funds initially assembled by Invesco.
This partnership solidifies Sapphire’s position as one of the largest and most active supporters of the emerging manager ecosystem in the venture capital industry, further augmenting its previous investments in earlier emerging funds, such as Amplify, Data Collective, and Union Square Climate—the first climate fund created by USV. As a result of this development, Sapphire’s assets under management now total $3.6 billion.
Elizabeth (“Beezer”) Clarkson leads Sapphire’s fund investing business, and she noted that this move aligns with Sapphire’s existing business model, which involves identifying promising fund managers in the United States, Europe, and Israel. She emphasized that the process involves proactive sourcing and talent identification, rather than simply waiting for opportunities to come their way.
