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Private equity investing: An overview

Basic mistakes in comparing FTSE and venture capital returns seriously undervalue the returns that can be achieved through venture captial investing. The true computations show, contrary to popular belief, that upper quartile venture capital funds have broadly outperformed quoted equities since 1990, according to Guy Fraser-Sampson of Mowbray Capital.

Annual figures for the performance of quoted shares and markets simply show the rise and fall of a price or index over a given year. Venture capital returns, by contrast, are prepared on a vintage year basis and show IRR to date. It is not, therefore, possible to usefully compare the two.

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Guy Fraser-Sampson is the managing partner of Mowbray Capital. Mowbray Capital Fund of Funds was launched in May 2004 and is the only fund of funds exclusively targeting the European venture market. for more information please visit www.mowbraycapital.com