Venture capital sees muted year with 0.3% return
U.S. private equity had its best annual return since 2013 with 4.5% for the quarter and 12.9% for the year ended Dec. 31, while U.S. venture capital returned -0.1% and 0.3%, respectively, according to the latest performance information from Cambridge Associates' U.S. private equity and venture capital indexes released Tuesday.
The U.S. private equity return for the year ended Dec. 31, 2013, was 21.16%. U.S. venture capital performance was the worst since 2008 when the return was -16.65% for the year.
U.S. private equity returned an annualized 13.2% for the five years, 10% for the 10 years and 12.4% for the 15 years ended Dec. 31. U.S. venture capital return was 1% for the five-year, 9.4% for the 10-year and 6.8% for the 15-year periods.
Cambridge's indexes are capital weighted, pooled horizon internal rates of return, net of fees, expenses, and carried interest.
By comparison, Cambridge's U.S. private equity index return was 0.49% for the fourth quarter and 5.86% for the year ended Dec. 31, 2015. U.S. venture capital returns were 1.64% for the fourth quarter and 12.88% for the 12 months ended Dec. 31, 2015
Private equity managers called less capital than made distributions in 2016, calling $99.1 billion, up 12% from 2015, while distributing $122.2 billion in 2016, down 1% from the prior year. Venture capital managers distributed more capital than they called, with capital calls down 24.4% to $12.8 billion and distributions down 33.6% to $18.7 billion in 2016.