Sequoia Capital partner Eric Upin has left the storied Silicon Valley venture capital firm to work at investment management firm Makena Capital Management, according to Forbes.

This news follows a report earlier this week that another Sequoia partner, Michael Beckwith, has also left the firm. Upin and Beckwith had joined Sequoia last year to help the respected firm (backer of Apple, Cisco, Google, YouTube and many others) create a hedge fund for investing  in publicly traded companies. Apparently, this plan has become one of the casualties of the recession.

Venture firms have had trouble making “capital calls,” or drawing on the money they’d been promised by investors in their funds. Some of those investors, including major universities, have lost billions in value in their investment portfolios because of the recession and can’t provide the money they’d intended for venture firms. Sequoia may have had difficulty raising the intended money for a more hedge fund-like effort, Forbes guesses; tellingly, top rival venture firm Kleiner Perkins has faced similar liquidity issues recently.

At this point, Sequoia seems to be returning to its focus on earlier-stage investments, where it enjoys a reputation of being better than just about any other firm. Most recently, it saw a financial win from an early bet in Pure Digital Technologies, maker of the Flip videocamera sold to Cisco in a deal announced yesterday. Sequoia also recently announced an investment in seed-stage investing firm Y Combinator.

Upin formerly ran Stanford University’s endowment fund. Makena would be a good fit for him, as its investment strategy is “similar to that used by the top academic endowments in North America.” Makena’s web site is quite bare; it’s not clear what relationship it might have with either Stanford or Sequoia, if any. [Update: In comments below, we’re informed that Makena is run by Mike McCaffrey, who formerly ran the Stanford endowment, hence the connection with Upin.] We’ve asked the firm for further comment and will update if we hear back.

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On a related note, Upin and Beckwith both reportedly spoke at a Sequoia Capital meeting with the firm’s portfolio companies last fall as part of a PowerPoint presentation entitled “RIP: Good Times.” The presentation addressed how larger economic issues will affect startups and investors. Specifically, Sequoia partners told their portfolio companies to radically cut costs and prepare for the worst and to take advantage of the companies that didn’t.

Here is what they reportedly said:

Michael Beckwith, Partner:

  • A dramatic recovery is unlikely
  • Spending cuts will accelerate through this quarter and into next year
  • Only lean companies with proven sales models will be acquisition targets

Eric Upin, Partner:

  • This could be at least a 15-year downward cycle, judging by historical trends; the credit market will take a long time to recover
  • Startups need to deeply cut expenses and throw out existing projections