Performance and Public Market Equivalent Report 2020

This report has been produced by the British Private Equity and Venture Capital Association (“BVCA”) to demonstrate the returns generated for investors by our members to 31 December 2020 and to compare these returns to equivalent investments in the UK public equity markets – using the FTSE – All Share Total Return as the benchmark index. The performance statistics in this report are the result of the BVCA’s Performance Measurement Survey, an annual survey of fund level cash flows and valuations collected from our members. The public market equivalent analysis uses the same underlying data set.

With a significant presence in the UK, developed over the past 30 years, private equity and venture capital investments provide companies with the finance and know-how to deliver sustainable business growth. Active ownership, over the medium to long term, delivers economic and social value to those involved in the businesses (from employees, management and owners on the one hand, to customers and suppliers on the other) and a wide group of stakeholders (from local communities and local and regional economies, to national policy makers focused on issues such as climate change, diversity and inclusion (D&I) and social issues).

Both private equity and venture capital firms are focused on delivering sustainable growth for the companies in which they invest: venture capital funds typically support early stage and younger companies, holding minority stakes in the businesses, while private equity funds typically acquire controlling stakes in more established businesses.

The Performance Measurement Survey (PMS) 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. We at the BVCA firmly believe that private equity and venture capital funds are an exciting and attractive investment opportunity for pension schemes and other investors and the results of the Performance Measurement Survey and this Public Market Equivalent analysis show us why.

For the 2020 Performance Measurement Survey, we received responses from 119 members out of a total eligible pool of 158 members, a response rate of 75%. For comparison, in 2019 we received response from 117 members out of a total of 154 who were eligible. 

This report uses the data collected for the 2020 Performance Measurement Survey and applies two main Public Market Equivalent (‘PME’) methodologies to compare the performance of the private equity and venture capital funds in our database to the UK public equity markets, specifically the FTSE All-Share Total Return Index.