If have reached this point, you probably have lost this LP and are unlikely to be able to turn them around. That being said, here is what this LP is missing. Unlike the asset classes that this LP is citing, there is a MAJOR difference between an exceptional VC and an ok one. For example, an OK outcome is the 2.5x that this LP is citing. However, it's not uncommon for great VCs to deliver 10x+ returns. It's also not uncommon for exceptional new and emerging managers with small funds like yours to deliver even greater returns if they are able invest in the right company. For example, if you can participate in the pre-seed round of the next Uber, that investment alone will likely 10x+ your entire fund even if all the other investments go to 0. 

What you must do in situations like this is to turn the LP from trying to compare asset classes, to discussing potential outlier companies that you may be able to get them into.