Peter Thiel, best known as the first outside investor in Facebook, hasn’t been seduced by the Twitter party.
He told Dealbook: “Is Twitter worth $7 billion? The broader question is, is it going to help people have a much higher quality of living? And I think on that score, its benefit is a lot less.”
Thiel says he’s eschewing tech start-ups for a basic reason: they’re not “taking civilisation to the next level.”
His new investment beat? Biotech, healthcare and artificial intelligence companies.
(“His venture capital firm, Founders Fund, has made investments in Halcyon Molecular, a DNA sequencing start-up; Practice Fusion, an electronic health record system; and SpaceX, a spaceship builder, according to Dealbook).
But an alleged tech bubble is not the bubble about which Thiel is most concerned. In his opinion, the far bigger problem is ‘education bubble’ — “Price is up by a factor of 10; quality hasn’t really changed. There’s something really crazy going on here.”
Clarium’s returns suggest Thiel’s outlook, while refreshing, might not necessarily be right for now.
The hedge fund fell 23% in 2010, making it the third straight year of losses. At last (public) count, total AUM had fallen 90% to ~$680 million from its 2008 peak of $7.2 billion — money made when the venture capitalist correctly predicted the implosion of the housing market.
Last week, most hedge funds filed their Q1 holdings report — a 13F-HR — with the SEC. We couldn’t find one from Clarium. The most recent filing was for Q4 last year. We asked the hedge fund as to why this is, but we’re yet to hear back.
Every single money manager who runs a fund with a portfolio worth $100 million or more, must file a 13F every quarter.
Apparently “Thiel is still active at Clarium,” according to Dealbook, “but those close to the company say his daily involvement has diminished. He… admits to spending more time on his venture capital” projects. Not surprising, considering the hedge funds returns are poor; his venture capital returns are the stuff of legends.