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Most Consistent Performing Venture Funds

by Gary Broughton

  • 15 Apr 2011
  • PE

For an institutional investor looking to make a commitment in a venture-focussed private equity fund, an important consideration is the performance track record and consistency of the general partner. Using performance data for over 1,600 venture funds raised by over 750 private equity fund managers, we have compiled a method of ranking the most consistent performers in the venture fund universe, based on the quartile ranking assigned to each fund.

As quartile rankings are only assigned to funds with a more mature vintage, such consistency rankings are restricted to funds with vintages of 2008 or earlier. 2009-2011 vintage funds are excluded because such vehicles are still early in their investment life cycle, meaning that there has not yet been sufficient time for the fund managers to add value to their portfolios. The ranking tables are also constrained to managers who have raised three or more funds of a similar strategy and to those who have raised at least one fund within the last six years.

Application of this selection methodology results in a sample of 151 firms, managing a total of 722 funds. Consistency scores are then compiled by assigning each of the GPs’ funds a numerical score and then taking an average of these scores. A top quartile fund is awarded a score of one, a second quartile fund a score of two, and so on. Using this point system, the most consistent performing venture-focused fund managers hold an average score of 1.00.

At the top of the consistency table are BlueRun Ventures, Celtic House Venture Partners, CHAMP Ventures and Nexxus Capital, all of which have three top quartile funds, resulting in an average consistency score of 1.00 for each of these firms. Other prominent firms appearing in the table include Benchmark Capital and Matrix Partners, both of which hold an average consistency score of 1.33.

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