Top Tier Capital Partners Closes $1.2 Billion in New Funds

(Bloomberg) -- Top Tier Capital Partners, a firm that's known for investing in some of Silicon Valley's best venture firms, has raised $1.2 billion in new funds, bringing its total capital under management to $7.5 billion.

The San Francisco-based firm invests in venture firms such as Andreessen Horowitz, Mayfield Fund and True Ventures. Top Tier also invests directly in startups before they go public such as DraftKings Inc., as well as Talkspace, which announced a deal to list via a blank-check company.

Its own investors include pension funds, family offices and endowments. The firm said that about half of its capital is from outside the U.S.

David York, Top Tier's chief executive officer, said the firm's long track record in the industry has helped provide opportunities to invest in some of the best venture firms.

“Ninety percent of the success comes from roughly 10% of the managers,” he said, emphasizing that most of the venture returns come from the top teams. He looks for firms with strong networks and a history of “being able to see around corners.”

Although some of its investments have benefited from the boom in special purpose acquisition companies, or SPACs, York is lukewarm on the so-called blank-check companies.

“They are a little bit trendy and today there's a lot of them,” he said. “They come and go.”

The strong performance of technology stocks has been good for venture returns, but it has also been expensive to make new investments.

Still, said Top Tier managing director Garth Timoll, “even in this market, there is opportunity to make money.”

Timoll said that the firm valued diversity, even before the venture industry came under scrutiny in recent years for having so few partners who were women or from underrepresented backgrounds.

“We've always had a very diverse leadership team,” said Timoll, who is Black. “This is not a new phenomenon for us.”

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