Preqin’s Performance Analyst currently holds information on 1,622 venture capital funds, of which 1,168 are North America-focused venture capital funds.
Historically, returns of North America-focused Venture funds have been seen to vary considerably. High returns were evident in the mid to late 1990s as a result of the various technology opportunities available, resulting in IRR figures as high as 514.3% for a vintage 1998 fund, and 447.4% for a vintage 1995 fund. Consequently, fund managers had to obtain higher returns to be considered top quartile, for instance, returns of 69.8% for a vintage 1997 fund. This period of high returns was then followed by the bursting of the dot-com bubble in the late 1990s, which inevitably resulted in lower returns, such as median IRR figures of -2.5% for 1999 vintage funds. Since this point in time, returns have remained low as fund managers struggle to generate the high returns seen in the previous decade.
However, in looking at the most recent vintages, signs of a recovery are clearly apparent, with an increase in the top quartile boundary figures from 7.6% for 2005 vintage funds to 20.2% for 2009 vintage funds. Similarly, median IRR figures have been seen to rise, from 1.9% to 12.2% respectively; maximum IRR figures are also rising, to as much as 91.3% for a 2010 vintage fund. Nevertheless, it is important to note that despite improvements in the returns figures reported for recent vintages, these funds are still early in their fund lives and hence their returns could change as these funds mature.