Analysis of UK VC Financial Returns

The Analysis of UK Venture Capital Financial Returns report provides the most comprehensive and robust approach to date for assessing the comparative performance of UK VC funds compared to US VC funds since 2002.

It draws together data from existing data sources including PitchBook and Preqin, and from the British Business Bank’s own programmes, to provide as comprehensive a picture as possible of the Venture Capital asset class and its performance, and makes a specific case for UK VC within global VC allocations.

Key findings

  • For funds with a 2002-2006 vintage, UK VC funds outperformed US VC funds, with a pooled Distribution to Paid-In (DPI) of 1.95 compared to 1.04
  • From 2007 onwards, UK VC funds’ performance is only slightly lower than the US, with a UK pooled Total Value Paid-in (TVPI) of 1.54 compared to 1.88 for the US, a 0.3-point difference
  • The DPI of UK VC Funds with a 2002-2006 vintage (1.95) is even comparable with that of US funds when they were at their highest, in the 1980s (2.22) and 1990s (2.56)
  • Over the entire 2002-2011 time period, UK VC returns come out slightly ahead of those of the US
  • UK VC funds share a similar distribution of returns compared to US funds, apart from a small number of top US funds that outperform significantly.

 

 

This new report is a first step towards meeting one of the main recommendations of the British Business Bank/Oliver Wyman Future of DC Pensions  report published last month: that the Bank should take the lead to improve the quality of data demonstrating the level of UK VC returns.

The recommendation arose from the finding that publicly available data on VC returns comes from a small number of data sources and can be inconsistent.

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Read British Patient Capital’s response to Analysis of UK VC Financial Returns

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View the report