Good day. American pension funds and other limited partners in venture funds are assessing increased risks associated with indirect investments in Chinese startups.

Los Angeles County Employees Retirement Association, for example, noted its exposure to the market in the agenda it posted online for its Board of Investments meeting on Aug. 9.

Lacera said that venture firm GGV Capital is one of the U.S. venture firms that recently received letters from the House Select Committee on the Chinese Communist Party inquiring about its investments in Chinese tech startups, as The Wall Street Journal previously reported. 

“LACERA is an existing limited partner in several GGV funds dating back to 2014. Staff is monitoring the situation and will provide updates to the Board,” the meeting agenda notes read.

A spokeswoman for GGV declined to comment. A Lacera spokesman also declined to comment.

The White House last week issued an executive order banning investments in some Chinese technology because of national security concerns. The Treasury Department, which is tasked with coming up with rules implementing the order, said that it is considering exempting some LP investments in venture funds under the order.

Meketa Investment Group, which advises pension plans, is helping Lacera assess its strategy when it comes to China.

About 2% of Lacera’s assets under management were invested in China as of June, according to the pension plan’s figures. As part of Lacera’s strategic asset allocation planning, the pension plan noted potential changes. It said that Meketa provided models for Lacera’s equity investments including and excluding China.

Meketa estimated in a December report that investments in China represent roughly 3% to 5% of total portfolios of large U.S. public pension plans. While most of the investments in China are via public company holdings, Meketa’s report said, private equity, which includes venture capital, also accounts for a meaningful part.

“Outsized portfolio exposure to China may warrant renewed cost/benefit evaluation in light of growing ideological activism from China’s [Chinese Communist Party] and the increasingly strident U.S. policy of China containment,” Meketa said in its report. After examining their investments in China, investors may need to “work with investment managers to actively cap China exposures in their portfolios,” the report said.

And now on to the news...

Tesla alums win big in green energy. Governments everywhere are trying to build domestic clean-energy industries, from electric cars to solar panels. No company has had more recent success doing that than Tesla, and no executives are in greater demand than the auto maker’s alumni, The Wall Street Journal reports.

• More than 30 companies led or launched by former Tesla employees have raised more than $26 billion in the past decade, most in the past few years, a Wall Street Journal analysis of data from PitchBook shows. Much of that money went to a handful of companies in the electric-car and battery supply chain: luxury electric-vehicle company Lucid Group, European battery upstart Northvolt and battery-recycling firm Redwood Materials.
   
• Many of these companies focus on domestic manufacturing, as Tesla has for more than a decade. They are well-positioned to take advantage of last year’s U.S. climate law and Europe’s response to it. A key goal for both is to whittle away at China’s dominance in critical clean-energy industries.

Vesttoo, an Israeli startup that aims to use artificial intelligence in the insurance industry, filed for bankruptcy in the U.S. Monday after being accused of acting as a conduit for a multibillion-dollar fraudulent scheme involving faked letters of credit, WSJ Pro reports. The Federal Bureau of Investigation, several state insurance commissioners, and the Bermuda Monetary Authority are conducting probes into the matter, The Wall Street Journal reported earlier this month.

• White Rock, a subsidiary of insurance giant Aon that conducted business with Vesttoo, sued the firm last week seeking to freeze its assets and bank accounts, alleging that Vesttoo presented it with fraudulent letters of credit from third-party institutions totaling more than $2 billion.
   
• Vesttoo’s new interim chief executive officer, Ami Barlev, said in a statement that forensic investigators working for Vesttoo found that “a number of factors, external to the company, led directly to the current crisis, including the involvement of certain foreign banks and financial institutions.”

People

MaC Venture Capital appointed Jennifer Randle as chief operating officer. She was previously executive vice president of finance and operations for The Chernin Group.

Leasecake, a provider of lease management and accounting technology for the restaurant and retail industries, promoted Scott Williamson to chief executive from chief operating officer. He was previously at JLL.

Data privacy startup Confidencial named Stewart Walchli the company’s new chief executive. He was previously co-founder and chief revenue officer of Introhive.

Zennify, a Salesforce and nCino consultancy, added Michael Rouleau as chief revenue officer. He was most recently senior vice president of customer success at Salesforce.

Zeelo, a London-based private bus and shuttle transport provider, secured $14 million in Series A funding from investors including FlatzHoffmann and Ireon Ventures.

Apica, a Stockholm-based monitoring and observability platform, raised $10 million from existing investors including Oxx. The company also agreed to acquire observability data fabric startup Logiq.ai for an undisclosed amount.

Phospholutions, a State College, Pa.-based sustainable fertilizer technology provider, picked up slightly more than $10 million in funding led by Advantage Capital. The investment will accelerate the commercialization of the company’s RhizoSorb in the U.S. row crop market.

The Demex Group, a Washington, D.C.-based risk management startup focusing on financial losses from non-catastrophic but extreme weather events, snagged a $5 million investment led by Blue Bear Capital.

Altos Radar, an automotive 4D imaging radar startup, was seeded with a $3.5 million investment from Monad Ventures and others.

• Streamflation is here and media companies are betting you’ll pay up
   
• The sound of music: scientists reconstruct songs from brain activity
   
• China Evergrande’s EV unit to get cash injection from Dubai automaker 

• Steve Schwarzman is pushing buzzy Blackstone division to get its act together (Bloomberg)
   
• Lending startups seek buyers as rate hikes hobble growth (The Information)
   
• Bitcoin volatility hits all-time low as trading volume slumps (The Block)

This newsletter was compiled by Yuliya Chernova and Zachary Cole.

WSJ Pro Venture Capital is a premium service of The Wall Street Journal. We cover venture capital and the global startup ecosystem. Share your tips, comments and questions: vcnews@wsj.com

The Team: Matthew Strozier, Yuliya Chernova, Brian Gormley, Angus Loten and Marc Vartabedian.

Follow us on X: @wsjvc