Are VCs Encroaching on Hedge Funds' Turf?

Eric Upin, who left his post as Chief Investment Officer for Stanford University’s investment group, has resurfaced at VC shop Sequoia Capital.

He’s not going far: moving his desk a mere four miles as the crow flies. But there are whispers that, what this job jump lacks in geographical shift more than makes up for it in the strategic shift of his new employer. Private Equity Hub’s Dan Primack, who broke the news, mulled its meaning.

Details are a bit sketchy as to what he’ll be doing, but sources believe that this could be the beginning of Sequoia’s long-rumored hedge fund practice. The Menlo Park-based firm has not yet discussed Upin’s role with all of its limited partners, although a few are being used as sounding boards.

This could be a case of rumors getting ahead of themselves. Upin, who covered enterprise software at Robertson Stephens before heading up its research desk, has no hedge-fund experience but deep connections in the Valley.

What’s more, as the Daily Deal observed, a representative of the VC industry testified last autumn before Congress that venture shops were more interested in building companies than “financial engineering.” But Sequoia may be an exception.

Well, at least the first exception. The Deal’s Alan Sherter wrote,

Sequoia isn’t your average venture firm. VC blue-bloods such as Michael Moritz and Roelof Boetha and a history of splashy exits have made it an industry bellwether. If Sequoia really is jumping into hedge funds, other VCs will be be tempted to follow suit. Their “unique argument” would look all too common.