Firm that will manage WI venture capital fund has questionable past
MADISON (WKOW) -- One of the two firms selected to manage Wisconsin's $25 million venture capital fund manages a similar program in New Mexico, which has lost money, and was put under increased oversight by state officials there for questionable investments.
Sun Mountain Capital, based in Sante Fe, New Mexico, joined Kegonsa Capital Partners of Fitchburg to form Sun Mountain Kegonsa. The Wisconsin Department of Administration announced last Friday that it has selected Sun Mountain Kegonsa to manage the state's new venture capital fund, which will provide money to start-up businesses and entrepreneurs in Wisconsin.
But Sun Mountain Capital has had some problems managing a similar fund in its home state.
Sun Mountain Capital was established in 2006 and has managed the New Mexico Private Equity Investment Program since that time. That program invests state money in funds that in turn provide dollars to New Mexico-based companies.
The most recent financial report prepared by Sun Mountain Capital for the New Mexico State Investment Council (SIC) shows that program, worth $307 million as of June 2013, has operated at a loss of -2.3 percent since its inception in 1993.
The report notes the program's performance has improved recently, producing $6.5 million in returns since 2004. But since that time, only 40 percent of the funds in the program are above the median return rate for similar venture capital funds nationwide.
That report also shows 19 of the program's 28 funds have lost money since its inception. Of those funds, eight have been liquidated, while two others are in the process of being liquidated. That leaves 18 remaining funds in the program, 11 of which are currently operating at a loss.
Minutes from a SIC meeting in April of 2012, show the council voted to establish more oversight of Sun Mountain Capital in an effort to increase the transparency with which the company makes investments.
Well this is great.....a questionable past indeed. 
http://www.wkow.com/story/24434784/2014/01/13/firm-selected-to-manage-wi-venture-capital-fund
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