1q 2013 private equity & venture capital benchmarking report presentation slide deck
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1Q 2013 Private Equity & Venture Capital Benchmarking Report Presentation Slide Deck. Try the PitchBook Platform: Email: [email protected] Phone: 1-877-267-5593. Consult the Research Team: Email: [email protected] Phone: 1-877-636-3496. The PitchBook Platform. - PowerPoint PPT PresentationTRANSCRIPT
1Q 2013 Private Equity & Venture Capital
Benchmarking ReportPresentation Slide Deck
Try the PitchBook Platform:Email: [email protected] Phone: 1-877-267-5593
Consult the Research Team:Email: [email protected]: 1-877-636-3496
NAV Index
Source:PitchBook
NAV Index Methodology
PitchBook’s newly designed NAV Index tracks the quarter-to-quarter change in aggregate NAV for various assets classes. The quarterly change in NAV is calculated by applying the formula below to all funds tracked by PitchBook, then taking the median value for all funds.
Quarterly Percentage Change = [(NAV at end of quarter + distributions during the quarter – contributions during the quarter) / NAV at beginning of quarter] – 1
Source:PitchBook
Private Equity Has Consistently Outperformed
Both VC and Public Markets since 2001NAV Index for PE (dark blue), VC (light blue), S&P 500
(orange)
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
0
20
40
60
80
100
120
140
160
180
200
PE VC S&P 500
Source:PitchBook
Since 2007, the Net Change in NAV for VC and the S&P 500 is Virtually the SameNAV Index for PE (dark blue), VC (light blue), S&P 500
(orange)
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q2007 2008 2009 2010 2011 2012
40
50
60
70
80
90
100
110
120
130
140
PE VC S&P 500
Multiple Fund Type IRRs
Source:PitchBook
Buyout Funds Were the Top Performers in the Early 2000s, but Mezzanine Funds Have Outperformed in the
Post-Crisis EraGlobal Average IRR by Vintage Year
2001 2002 2003 2004 2005 2006 2007 2008 2009 20100%
5%
10%
15%
20%
25%
All PE Funds VC Funds Mezzanine Funds Fund of Funds
Aver
age
IRR
Source:PitchBook
The Performance of VC Funds Has Consistently Lagged Other Alternative Fund Types Over the
Last Decade Global Median Horizon IRRs
1-year 3-year 5-year 10-year0%
2%
4%
6%
8%
10%
12%
14%
16%
All PE Funds Buyout Funds VC Funds Mezzanine Funds Fund of Funds
Med
ian
IRR
Private Equity Fund Returns
Source:PitchBook
Outside of the Most Recent 1-Year Period, Smaller PE Funds Have Underperformed the
Rest of the IndustryMedian PE Horizon IRR by Fund Size
1-year 3-year 5-year 10-year0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
All PE Funds Under $250M $250M-$1B $1B+
Med
ian
IRR
Source:PitchBook
The Spread in Performance Between Fund Sizes
Has Decreased in More Recent VintagesMedian PE IRR by Fund Size and Vintage Year
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Vintage Year-5%
0%
5%
10%
15%
20%
25%
30%
35%
Under $250M $250M-$1B $1B+
Med
ian
IRR
Source:PitchBook
Top Quartile Funds No Longer What They Used to Be
Global PE IRR Quartiles by Vintage Year
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
-10%-5%0%5%
10%15%20%25%30%35%40%
IRR 25th Percentile IRR Median IRR 75th Percentile
IRR
Top Quartile
3rd Quartile
2nd Quartile
Bottom Quartile
Source:PitchBook
Mid-Decade Funds Still Showing Effects of the Crisis
Global Average PE Fund Return Multiples: DPI (dark blue), RVPI (light blue), TVPI (orange)
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011x
.2x
.4x
.6x
.8x
1x
1.2x
1.4x
1.6x
1.8x
2x
1.59x1.44x
1.16x.98x
.6x.39x .28x .22x .19x .15x .04x
.36x.42x
.47x.57x
.78x
.8x .95x .93x .96x .91x.9x
1.96x1.86x
1.63x1.56x
1.38x
1.19x 1.23x1.15x 1.15x
1.06x.94x
DPI RVPI TVPI
Fund
Ret
urn
Mul
tiple
s
Vintage Year
Source:PitchBook
The Majority of PE Funds Have Done A Good Job in Preserving and Growing Their
ValueGlobal PE TVPI Quartiles by Vintage
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010.8x
1x
1.2x
1.4x
1.6x
1.8x
2x
2.2x
2.4x
TVPI
Mul
tiple
Top Quartile
3rd Quartile
2nd Quar-tile
Bottom Quartile
Source:PitchBook
Recent PE Funds are Taking Longer to Return Capital to Their Investors
Global PE Median DPI by Vintage Year Over Time
2 3 4 5 6 7 8 9 10 11x
.2x
.4x
.6x
.8x
1x
1.2x
1.4x
1.6x
1.8x
2001 2002 2003 2004 2005 2006Years Since Final Close
Dist
ribut
ed O
ver P
aid
In (D
PI)
Source:PitchBook
U.S. PE Cashflows Turned Positive in 2011 as the Result of Strong Fund Distributions
U.S. PE Funds Annualized Cashflow ($B) by Year
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
$(200)
$(150)
$(100)
$(50)
$-
$50
$100
$150
$200
Distributions Contributions Net Cashflow
Cash
flow
($B)
* As of 6/30/12
*
Source:PitchBook
European PE Performance Has Trailed the U.S. in the 1-, 3-, and 5-Year Horizon
PeriodsMedian Horizon IRR by Fund Location
1-year 3-year 5-year 10-year
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
All U.S. PE Funds All European PE Funds
Med
ian
IRR
Source:PitchBook
The Last Several Years of European PE Vintages Have Struggled to Match Earlier
Performance Average IRR by Vintage Year and Region
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
All U.S. PE Funds All European PE Funds
Aver
age
IRR
Source:PitchBook
Global PE IRR League Table
Source:PitchBook
Global PE IRR League Tables
Source:PitchBook
Global PE IRR League Tables Continued
Venture Capital Fund Returns
Source:PitchBook
Venture capital fund performance has been disappointing over the last decade, but returns have improved over the most recent 1-year and 3-year time periods.
Source:PitchBook
$250 to $500 Million Funds Look to Be the Sweet Spot for Venture Fund Performance
Global Median VC Horizon IRR by Fund Size
1-year 3-year 5-year 10-year
-4%
-2%
0%
2%
4%
6%
8%
10%
All VC Funds Under $50M $50M-$250M $250M-$500M $500M+
Med
ian
IRR
Source:PitchBook
More Than a Quarter of All VC Funds Raised Since 2001 Currently Have a
Negative IRRGlobal VC IRR Quartiles by Vintage
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
-10%
-5%
0%
5%
10%
15%
20%
IRR 25th Percentile IRR Median IRR 75th Percentile
IRR
3rd Quartile
Top Quartile
Bottom Quartile
2nd Quartile
Source:PitchBook
Despite Slow Distributions, 2001 to 2010 Vintage
VC Funds Have an Average TVPI of at Least 1.0xGlobal Average VC Fund Return Multiples By Vintage Year
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011x
.2x
.4x
.6x
.8x
1x
1.2x
1.4x
1.6x
1.8x
.72x .7x .68x
.36x.56x
.25x .19x .19x.06x .04x x
.45x .48x .58x
.76x
1.12x
.91x 1.03x 1.02x1.02x 1.02x
.93x
1.17x 1.18x1.26x
1.12x
1.68x
1.16x 1.22x 1.21x1.08x 1.06x
.93x
DPI RVPI TVPI
Fund
Ret
urn
Mul
tiple
s
Source:PitchBook
Fund Selection Proves to Be Critical in Venture Investing, as Even Some 2nd Quartile Funds are in
the RedVC TVPI Quartiles by Vintage Year
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010.6x
.7x
.8x
.9x
1x
1.1x
1.2x
1.3x
1.4x
1.5x
1.6x
TVPI 25th Percentile TVPI Median TVPI 75th Percentile
TVPI
Mul
tiple
Bottom Quar-tile
Top Quar-tile
3rd Quartile
2nd Quartile
Source:PitchBook
The Median Venture Fund Does Not Cross the 1.0x DPI Threshold Even After 11
YearsMedian VC DPI by Vintage Over Time
2 3 4 5 6 7 8 9 10 11x
.1x
.2x
.3x
.4x
.5x
.6x
.7x
.8x
.9x1x
2001 2002 2003 2004 2005 2006
Years Since Final Close
Dist
ribut
ed O
ver P
aid
In (D
PI)
Source:PitchBook
Strong Distributions Have Kept U.S. VC Cashflows Positive For VC Fund LPs since
2010U.S. VC Annualized Cashflow ($B) by Year
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012*
$(40)
$(30)
$(20)
$(10)
$-
$10
$20
$30
$40
Distributions Contributions Net Cashflow
Cash
flow
($B)
Source:PitchBook
Global VC IRR League Table
Source:PitchBook
Global VC IRR League Table
Source:PitchBook
Global VC IRR League Table Continued
Source:PitchBook
Performance Benchmarks by Fund Type
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