Typical Net Cash Flow of Private Equity Funds by Vintage year

by Gary Broughton

  • 29 Jul 2011
  • PE

Preqin holds cash flow data for over 1,800 private equity funds, showing over 102,000 historic data points. From this data, we are able to model the net cash flow for typical private equity funds with vintage years 1997 – 2008 giving an indication of the change in net position to the LP as the fund’s investment cycle progresses.

By calculating annualised called-up and distributed figures based on an LP with a $10 million commitment, net cash flow figures can be found for each investment year by vintage to illustrate how typical net cash flow evolves over time within the private equity industry.

This analysis shows that the net cash flow has remained negative for all vintages except for 1997 and 1998 for which net cash flow became positive in the eighth investment year. Vintage 2001 funds show the highest net cash flow for all funds post 1998. However it should be noted that vintage 2005 – 2008 are still relatively early in their investment life and therefore net cash flow could increase over time to represent a more favourable position for the LP.

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