The ability to benchmark the performance of different asset classes is of paramount importance to investors when considering where to put their money. For publicly quoted equities and bonds which have clearly defined and often liquid markets, the returns are easily accessible, frequently updated in real-time, and easily understood. Private equity and venture capital, however, are somewhat different, reflecting the irregularity in the timing and discretionary nature of the cash flows between the fund and its investors.
Given these considerations, measuring private equity and venture capital returns requires a different approach to measuring the performance of more traditional asset classes. This section provides an overview of the key metrics used to evaluate the performance of private equity and venture capital funds. It also outlines various methodologies developed to benchmark the industry’s performance against that of the public market.
Additionally, this section reviews the growing body of academic and industry research on the performance of private equity and venture capital. The studies published in the last decade or so provide strong evidence that private equity and venture capital funds generate good returns for investors and outperform public markets over the long run.
Learn more about the BVCA's Research Advisory Group
These studies have been compiled with the support of the BVCA Research Advisory Group, a committee of senior academics and practitioners who enable us to access a wider pool of research. The BVCA Research team would like to thank all members of the Group for their input, guidance and advice.