Net returns per annum to investors in private equity funds raised by UK venture capitalists between 1980 and 2000 did not perform as well as the previous year, according to the British Venture Capital Association’s Performance Measurement Survey 2000. Performance returns in the 2000 survey were recorded at 25.5 per cent at year one, 28.9 per cent at year three, 26.4 per cent at year five and 20.4 per cent at year ten.
Large MBO funds have the highest return since inception at 19.6 per cent per annum, while development and early stage posted lower returns at 10 per cent and 15 per cent, respectively.
The technology sector, which tracks 36 funds with at least 60 per cent of their capital invested in technology-based companies, outperformed other sector funds in 2000 and over three, five and ten year periods. However these returns were not as strong as non-technology funds since inception. The overall net return to investors now stands at 16.4 per cent per annum on funds raised between 1980 and 1996, measured to December 31, 2000.
The BVCA’s survey highlights the performance of 244 independent UK private equity funds. This includes funds raised from external investors for investment in early stage, development and MBO transactions, but excluding venture and development capital investment trusts and venture capital trusts.