This Much I Know - The Seedcamp Podcast Thomas Kristensen, Principal at LGT Capital Partners on how to invest in Venture Capital funds
Nov 6, 2018
Thomas Kristensen, Principal at LGT Capital Partners, brings 14 years of experience in the venture capital realm. He reveals how asset managers like LGT evaluate VC funds, emphasizing the significance of identifying talented teams capable of spotting billion-dollar opportunities. Kristensen discusses the intricate dynamics of fund structures and the lengthy return cycles in venture capital. He also touches on investment misses, cognitive biases, and the balancing act between immediate gains and long-term strategies, offering a nuanced perspective on the future of venture funding.
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Why Invest in Venture Capital
- Venture capital investing offers exciting opportunities for outsized returns and innovation exposure.
- Fund of funds simplify complex ecosystems by selecting best VC funds for clients' diversified portfolios.
Focus on Multiples Over IRR
- Venture capital funds focus more on multiples rather than IRRs due to varying time to exits.
- Aiming to triple invested capital compensates for failed investments within the portfolio.
Managing Fees and Return Expectations
- Management fees at 2% annually over 10 years constitute a significant cost to investors.
- Funds must deliver roughly 3x returns to justify fees and create value for limited partners.