Aug 9, 2017

Private equity returns soar, VC sinks

Dan Primack, author of Pro Rata

U.S. private equity funds in 2016 posted their strongest annual net returns since 2013, while U.S. venture funds had their weakest year since 2008, according to new data from Cambridge Associates. Highlights of the numbers, which were calculated as of year-end 2016:

  • U.S. private equity: 12.9% (1 yr), 10% (3 yr), 13.2% (5 yr), 10% (10 yr), 12.4% (15 yr), 12.4% (20 yr)
  • U.S. venture capital: 0.3% (1 yr), 11.7% (3 yr), 14% (5 yr), 9.4% (10 yr), 6.8% (15 yr), 26.1% (20 yr)
  • Sector note: The strongest performing PE sector investments were in energy. For venture it was IT.
  • VC distributions: U.S. venture funds called $12.8 billion and distributed $18.7 billion in 2016, the fifth-straight year the latter outpaced the former. Both figures, however, were down significantly from 2015.
  • PE distributions: U.S. private equity funds called $99.1 billion in 2016 and distributed $122.2 billion. The inflows were the highest since 2007, while distributions fell 14% from 2015.

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