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US venture performance figures continue gradual improvement

A stronger exit environment underlay further gradual improvement in the performance of US venture capital funds in the second quarter, according to new figures published by the NVCA and Venture Economics.

Three-year venture returns were still negative at an annual 12.2 per cent but were up from 13.3 per cent in the first quarter. One year returns were 7.4 per cent, while the five, ten and 20-year horizon returns were 14.4 per cent, 26.7 per cent and 15.6 per cent respectively.

Toby Walters, research editor for Venture Economics, said: 'Venture capital returns were not only aided by the improving economy, which helped increase valuations, but also by increasing distributions from realisations of investments.

'The industry seems to be reaping the benefits of the strategy of focusing more on later stage financing of its healthier portfolio companies,' he said.

There were 29 venture-backed IPOs and 86 acquisitions in the second quarter, reflecting the improvement in exit conditions.

The data showed one-year buy-out returns at 23.7 per cent, while five, ten, and 20-year returns were 3.1 per cent, 8.5 per cent and 12.7 per cent respectively.

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