The BVCA, in association with PwC, publishes the Performance Measurement Survey Report each year which compares private equity and venture capital's performance with other asset classes over different time periods. The statistics in this report are the results of an annual survey of fund level cash flows and valuations collected from our members.
The Performance Measurement Survey looks at funds which invest in businesses at all stages of the growth lifecycle – from venture capital funds specialising in start-ups to large buyout funds investing in global corporations. The survey captures the performance of UK managed funds, including independent funds, venture capital investments and management buyouts, representing most of the UK private equity and venture capital industry, making the dataset and analysis rich and robust.
Our Performance Measurement Survey Report takes an in depth look at the data, presenting performance by vintage year, fund type and fund focus. We also publish accompanying data tables in excel for those who love the detail, and a separate methodology paper that sets out different methods for measuring the absolute and relative performance of private equity and venture capital.
In 2023 we received responses from 86 members out of a total eligible pool of 109 members, a response rate of 80%.
We are pleased to be able to contribute to the wealth of data evidencing the positive performance of UK private capital through this long running study.
Performance Measurement Survey
Report 2023: Key findings
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.
Performance Measurement Survey Review Board
The BVCA Performance Measurement Survey Review Board provides guidance and advice to the BVCA Research team. The Group comprises leading practitioners from within the GP and LP communities and representation from academia - all recognised for their experience and insight into the venture capital and private equity industry.