2017 PE & VC Fund Performance Report (Data through 1Q 2017)
December 14, 2017
Along with our typical performance coverage, this edition of the Fund Performance Report (sponsored by Donnelley Financial Solutions) includes a case study on 2007 vintage mega buyout funds. These vehicles were raised at the height of the last fundraising boom—a period that closely resembles the current market landscape. As such, an examination of performance from 2007 could provide insight into how funds being raised today may fare.
In addition, we recently introduced the PitchBook Benchmarks, which include a more granular breakdown of performance metrics by fund strategy, vintage, location, and size. The PitchBook Benchmarks includes all the data used for this performance report and much more for practical use in establishing specific benchmarks and goalposts for any private market strategy.
The growing spread between private market strategies identified last quarter has reverted towards the historical norm, as 10-year horizon IRRs converged regardless of the private market strategy, with private capital funds in aggregate delivering a 10-year horizon IRR of 8.3%.
The performance of 2007 mega buyout funds is not as dire as hearsay may suggest. For the 2007 vintage, only 6.7% of mega buyout funds have a TVPI of less than 1.0x, compared to 19.4% of funds with less than $1 billion.
The aftermath of the financial crisis has proven to be a boon for collective VC fund performance. Vintages after 2006 are outperforming prior vintages by a significant margin; in fact, the bottom-quartile IRRs of 2009-2013 vintages exceed the median IRRs of 2001-2007 vintage fund returns.