Hedge Fund Superstar Lee Ainslie Is Launching A Venture Capital Fund

Lee AinslieCraig Barritt/Getty ImagesMaverick Capital CEO Lee Ainslie

Maverick Capital is launching a $US50 million venture-capital fund, joining a growing number of Wall Street firms that are cashing in on Silicon Valley.

The Wall Street Journal’s Juliet Chung reports that Maverick’s fund will focus on companies in the software, healthcare and consumer industries.

It launches on January 1.

Maverick Capital is helmed by Lee Ainslie. The fund has returned 12% since its founding in 1995. The S&P 500 has returned 9.4% over the same period.

This will not be the first time Maverick is investing in the startup space. With some large investment banks, it bought a stake in Perzo, the instant messaging startup that will rival the Bloomberg terminal’s chat function.

Maverick has returned about 12% on average every year since 1995, compared to 9.4% for the S&P 500.

But some experts are warning that Wall Street’s rush to Silicon valley may be making some startups overvalued.

According to the Journal:

“A similar dynamic played out in the dot-com boom, when money managers flocked to venture-capital investing after years of eye-popping valuations. Many of those managers got in just before the Internet bubble burst.”

David York, managing director of the San Francisco-based Top Tier Capital Partners LLC, which invests client money in venture funds, sounded a similar worry.

“We are far more cautious today than we were two years ago because of the money flowing into the late-stage space both from hedge funds as well as from mutual-fund companies,” he said in an interview.”

For the full story head to the WSJ>

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