Key Takeaways
- • 31% markdown on $3 billion fund: UTIMCO, the endowment manager for University of Texas and Texas A&M systems ($65 billion in assets under management), wrote down its stake in Joshua Kushner's Thrive Capital by 31% by end of 2022, according to public records obtained by Insider.
- • Carvana exposure drives the loss: The markdown is almost entirely attributable to Thrive Capital's investment in Carvana, the online car marketplace that collapsed from $184 per share at the start of 2022 to approximately $4 by year-end, nearly triggering bankruptcy.
- • Fund structure and timing: Thrive Capital closed its $3 billion fund at the beginning of 2022, allocating $500 million to early-stage investments and $2.5 billion to late-stage companies, but faced severe valuation pressures as tech market conditions deteriorated throughout the year.
- • Broader endowment writedowns: UTIMCO also marked down stakes in other prominent venture firms including Sequoia Capital and Y Combinator, indicating systemic valuation pressure across the VC sector in 2022.
- • Limited transparency in VC returns: The writedown was only revealed through a Public Records Act request, underscoring that venture capital funds are not required to publicly disclose returns or holdings, limiting LP visibility into performance.
Summary
Joshua Kushner's Thrive Capital faced significant valuation pressure in 2022, with UTIMCO—the endowment manager for the University of Texas and Texas A&M systems controlling $65 billion in assets—marking down its stake in the firm's $3 billion fund by 31% by year-end. The markdown, obtained through a Public Records Act request and reported by Insider, reflects the severe contraction in technology valuations during 2022 and highlights the concentration risk inherent in late-stage venture portfolios.
The 31% decline is almost entirely attributable to Thrive Capital's investment in Carvana, the online used-car marketplace that became emblematic of failed venture-backed business models. Carvana's stock collapsed from approximately $184 per share at the start of 2022 to around $4 by December, pushing the company to the brink of bankruptcy. Despite a recovery rally in early 2023, the stock remained severely depressed at approximately $12 per share. Thrive Capital had allocated $2.5 billion of its $3 billion fund to late-stage investments, creating meaningful exposure to portfolio companies facing severe headwinds in a deteriorating macro environment.
The timing compounds the impact: Thrive Capital closed its $3 billion fund at the beginning of 2022, just as venture capital experienced a dramatic inflection point. The fund's structure—$500 million for early-stage bets and $2.5 billion for late-stage companies—reflected the firm's growth-focused strategy but left it heavily exposed to maturing companies facing refinancing challenges and margin compression as interest rates rose and public market multiples collapsed.
UTIMCO's writedown was not an isolated incident. The endowment manager also marked down stakes in Sequoia Capital and Y Combinator, according to prior reporting, indicating that valuation pressure extended across the entire venture ecosystem in 2022. This broad-based markdown suggests the decline reflects genuine shifts in company valuations rather than Thrive-specific operational issues.
The disclosure also underscores persistent opacity in venture capital performance. VC funds are not required to report returns or disclose holdings, limiting LP visibility into portfolio health. UTIMCO's markdown only became public through a Records Act request, highlighting that endowments and other major institutional investors often lack standardized reporting on their venture commitments—a structural information asymmetry that contrasts sharply with liquid asset classes and has material implications for portfolio risk management.
The 31% decline is almost entirely attributable to Thrive Capital's investment in Carvana, the online used-car marketplace that became emblematic of failed venture-backed business models. Carvana's stock collapsed from approximately $184 per share at the start of 2022 to around $4 by December, pushing the company to the brink of bankruptcy. Despite a recovery rally in early 2023, the stock remained severely depressed at approximately $12 per share. Thrive Capital had allocated $2.5 billion of its $3 billion fund to late-stage investments, creating meaningful exposure to portfolio companies facing severe headwinds in a deteriorating macro environment.
The timing compounds the impact: Thrive Capital closed its $3 billion fund at the beginning of 2022, just as venture capital experienced a dramatic inflection point. The fund's structure—$500 million for early-stage bets and $2.5 billion for late-stage companies—reflected the firm's growth-focused strategy but left it heavily exposed to maturing companies facing refinancing challenges and margin compression as interest rates rose and public market multiples collapsed.
UTIMCO's writedown was not an isolated incident. The endowment manager also marked down stakes in Sequoia Capital and Y Combinator, according to prior reporting, indicating that valuation pressure extended across the entire venture ecosystem in 2022. This broad-based markdown suggests the decline reflects genuine shifts in company valuations rather than Thrive-specific operational issues.
The disclosure also underscores persistent opacity in venture capital performance. VC funds are not required to report returns or disclose holdings, limiting LP visibility into portfolio health. UTIMCO's markdown only became public through a Records Act request, highlighting that endowments and other major institutional investors often lack standardized reporting on their venture commitments—a structural information asymmetry that contrasts sharply with liquid asset classes and has material implications for portfolio risk management.
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