Highland Capital Partners Seeking $400M New Fund

Boston-area venture capitalists have been busy raising money in recent months, and here’s one more to add to the list.

Highland Capital Partners, based in Cambridge, MA, has filed paperwork with the Securities and Exchange Commission that outlines its plan to raise a $400 million ninth fund.

The SEC filing says Highland is seeking that much, but the paperwork does not report any money raised yet from limited partners. I have asked Highland for comment, although it should be noted that if the firm is still marketing its new fund, there are legal restrictions on what it can say publicly.

This isn’t a big surprise, as Dan Primack of Fortune reported in November that the firm was expected to start marketing a fund of this size. As he noted, a $400 million fund mirrors the size of the previous Highland fund, which dates from 2009.

Highland Capital Partners has been active in recent years, backing startups like Aereo, the online TV startup that is roiling the broadcast industry; QD Vision, which makes nanomaterials used in consumer electronics; Infinio, working on IT management software; and Kyruus, a healthcare software provider.

Other notable bets in the Boston area include custom-jewelry seller Gemvara and Rethink Robotics, founded by robotics expert Rodney Brooks.

While it’s too early to judge some of the firm’s more recent funds, figures from the California pension investment fund show that more mature Highland funds haven’t resulted in the mega-returns investors are looking for.

The Calpers data shows that Highland Capital Partners V, dating from 2000, only returned roughly the amount of capital invested. Highland Capital Partners VI, dating from 2001, did a little better, returning 1.6 times the capital invested by California. That’s an internal rate of return of about 12.7 percent, and nothing special considering the risk in VC investing.

That kind of performance hardly makes Highland unique, of course, considering the relatively poor showing of VC in general in the past decade or so.

Along with its Boston-area headquarters, Highland has offices in Menlo Park, CA and Shanghai.

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