Industry Performance

This report demonstrates the returns generated for investors by our members to 31 December 2023.

The industry return, measured by the since inception internal rate of return since 1980 is 14.5% p.a. The equivalent measure since 2014 is 17.8% p.a.

These annual returns are equivalent to investors getting a 1.82x return on capital invested over the past decade (i.e. nearly doubling their money) and a 1.80x return on capital invested since 1980, including the value of unrealised investments at their 31 December 2023 values.

However, not all funds generate superior returns, and our detailed analysis shows the range of returns to be wide, with some funds ultimately may not generate a positive return. Investors in private equity and venture capital funds are typically institutional, well-advised investors, who will be aware of the spectrum of returns.

Alongside absolute return metrics, this year’s report also includes the findings of a Public Market Equivalent (PME) analysis. The PME analysis allows us to compare the relative performance of private capital and venture capital funds managed by BVCA members against the public equity market as represented by the FTSE All-Share Total Return Index and by the MSCI Europe Total Return Index.

The PME analysis using the Capital Dynamics PME+ method implies that, if investors in private capital since 2001 had made an equivalent investment in the FTSE All-Share Total Return Index or the MSCI Europe Index, they would have achieved a return of 6.8% p.a. or 7.7% p.a. respectively, both significantly lower than the 14.1% p.a. internal rate of return collectively achieved by funds in our dataset.

The Performance Measurement Survey Report 2023 can be found here. For those interested in analysing the data, an excel spreadsheet with all the numbers from the report can also be found here, alongside additional granular analysis by investment stage, subcategory and vintage year, and the Performance Measurement Survey Methodology paper here.