The UK Venture Capital Financial Returns 2022 report provides a comprehensive assessment of the performance of UK VC funds since 2002, as well as providing comparisons to the US and the rest of Europe. The report draws together data from existing data sources including PitchBook and Preqin, and from the Bank’s own programmes, as well as a survey of fund managers.
The report is broken down into the following sections:
– Section 1 provides an overview of VC financial returns across the UK, US and rest of Europe. It also includes feedback from UK VC fund managers on current VC market conditions including exit opportunities and deal flow quality.
– Section 2 assesses the performance of VC funds the Bank and British Patient Capital (BPC) has invested in and compares them against the overall VC market for funds of a similar vintage.
- In the year to 31st March 2022, fund valuations for recent fund vintages have held up. Higher company valuations and strong exit activity in 2020 and 2021 have contributed to a material uplift in fund valuations over recent years. As of 31st March 2022, UK VC funds with a 2008 to 2013 vintage have generated a pooled TVPI multiple of 2.20, which is 0.11 points higher than a year ago. This shows UK VC fund valuations have so far been resilient to the adverse headwinds affecting global finance markets.
- UK VC funds continue to report similar returns overall compared to their US counterparts. Historically US VC financial returns were considered by many in the VC industry to be substantially higher than the performance of UK VC funds. Analysis of data within this report suggests that this is not the case, and returns are very similar between these two geographies since 2002.
- The top UK funds generate higher returns, but their performance still lags behind that of the top US funds. VC market returns are driven by the performance of outlier funds. Previous research identified that the top performing US funds have substantially higher TVPI multiples than the top UK VC funds. This is still true in the latest data, with the UK top performing one percentile funds with a 2002–2019 vintage generating TVPI return multiples of approximately 14, compared to around 29 in the US, but the UK’s TVPI multiple is an improvement on 11 presented in last year’s report.