23 May 2012
The BVCA has published its annual Performance Measurement Survey summary and Report on Investment Activity for 2011.
The Performance Measurement Survey, produced in association with PwC and Capital Dynamics, encompasses 501 UK-managed independent private equity and venture capital funds, and finds that the combined ten-year internal rate of return (IRR) stood at 14.3% for 2011, against 5.9% for total pension fund assets and 4.8% for the FTSE all-share over the same ten-year period.
Venture capital in particular has continued to generate solid returns. Funds that were established after the dotcom bubble, while still maturing, are at a critical juncture and show strong performance potential. Those with a vintage of post-2002 recorded a 4% IRR on a since inception basis in 2011 and a one-year IRR of 5.5%, the joint highest figure alongside mid-market management buyouts.
The Report on Investment Activity shows that BVCA members invested £18.6bn globally in 2011, marginally down from £20.4bn in 2010 as economic uncertainty continues to have a negative impact on the industry.
Joe Steer, Research Director at the BVCA, said: "These data show that private equity and venture capital continue to weather the UK's weak economic climate and deliver long-term returns to investors. In the face of uncertainty of the direction of the global economy, prolonged euro zone weakness and financial market volatility, returns this year remained positive, and over the longer term continue to outperform other asset classes. Investment activity remained relatively steady this year, reflecting the industry continuing to wait for a prolonged economic uptick."
John Dwyer, Global Head of Private Equity at PwC, said: "The private equity industry is still showing good returns and has proved itself capable of adding real value to the efficient execution of business and commerce. In addition, it has provided some real cover for the lack of consistent liquidity available in public markets."
FOR FURTHER INFORMATION PLEASE CONTACT
Joe Steer, BVCA: +44 (0)20 7420 1816
Tom Allchorne, BVCA: +44 (0)20 7420 1807
Notes to editors:
1. To view the Performance Measurement Survey please click here.
2. For the Report on Investment Activity, please click here.
3. The British Private Equity and Venture Capital Association (BVCA) is the industry body for the UK private equity and venture capital industry. The BVCA has approximately 500 member firms, representing the overwhelming number of UK-based private equity and venture capital firms and their advisers.
4. PwC firms help organisations and individuals create the value they're looking for. We're a network of firms in 158 countries with close to 169,000 people who are committed to delivering quality in assurance, tax and advisory services. www.pwc.com