When it comes to Garrett Van Wagoner, bigger might not always be better. The San Francisco-based fund manager's new
(VWPVX), quietly launched just four weeks ago, is significantly outperforming all his other funds. With just $30 million in assets thus far, Post-Venture has posted a 4% gain since its Dec. 31 launch, beating his other funds hands-down.
Van Wagoner Emerging Growth
fund (VWEGX), as of Monday, was down .47%, according to
Lipper Analytical Services
Van Wagoner Mid-Cap
fund (VWMDX) was up only 1.29%. And the
Van Wagoner Micro-Cap
fund (VWMCX) was up 2.89%, Lipper says. As of year-end, those funds had net assets of $638.2 million, $137.7 million and $140.7 million, respectively.
And even more remarkably, for much of the last month the Post-Venture Fund has been up to 50% in cash, according to Van Wagoner Funds managing partner Peter Kris. "We're still building up positions in the portfolio," says Kris. "When we get money in, we wait for the right time to invest it in the companies we want to own and at the right price. Just because you receive money in the mail every morning doesn't mean you rush out and spend it that afternoon."
The Post-Venture Fund invests in public companies that have recently obtained financing to launch new business ventures. Those criteria would emphasize companies that have just gone public, or public companies that have floated new stock or bond issues. But this fund has remained outside the radar of the Van Wagoner-hungry media. Post-Venture was unmentioned in Van Wagoner's Monday morning
interview and in an extensive interview in
Kiplinger's Mutual Funds '97
Van Wagoner (
profiled Jan. 7 in
) came out of nowhere when he began managing
Govett Smaller Companies
(GXCQX) fund, and instantly became the top fund manager in the country. In 1993 he had a 58.5% return, in 1994 28.7%, ranking him number one among diversified fund managers. Word got out about his skills, and Govett's inflows exploded. The fund, which had managed less than $100 million in Van Wagoner's first two years, ballooned to $650 million in assets.
But now, with four funds and some $100 million in seven institutional accounts, Van Wagoner's managing over a billion dollars in assets. And his results in the last year -- all three funds returned between 24% and 27% -- were well off the 53% average he'd racked up in the three years previously. Based on the month's results alone, Post-Venture seems like a contender to bring Van Wagoner back to the road of glory.
But just how he's doing it so far remains a mystery. Van Wagoner has declined to make available to investors the top five holdings of the Post-Venture Fund. Emerging Growth, Mid-Cap and Micro-Cap release that information at the end of each month. But Kris says Post-Venture will keep its cards close to its chest until at least the end of the quarter. However, he insists that Van Wagoner is not manipulating IPOs in the first few months of Post-Venture's existence to post numbers that will attract investors.
Indeed, in this Post-Venture Fund, the very concept of manipulation seems inapt. "Funds that have been accused of that have been charged with flipping money in and out of IPOs," says Kris. "But this is a fund that is allowed to get into IPOs. Anyway, the IPO season hasn't really begun yet."
By Cory Johnson
Note: Cory Johnson owns shares in the Van Wagoner Post-Venture Fund.