UK Venture Capital Financial Returns 2021

The UK Venture Capital Financial Returns 2021 report provides a comprehensive assessment of the performance of UK VC funds since 2002, as well as providing comparisons to the US and the rest of Europe. The report draws together data from existing data sources including PitchBook and Preqin, and from the Bank’s own programmes, as well as a survey of fund managers.

Key findings

• UK VC funds with a 2002-2016 vintage have delivered strong financial performance generating a pooled DPI multiple of 1.01 and a pooled TVPI multiple of 2.08, comparable to the 1.12 and 1.97 generated by US VC funds.
• The performance of UK VC has improved sharply over the past twelve months. Comparing reported performance of UK VC funds for 2021 against 2020 shows that pooled DPI and TVPI multiples have increased by 0.24 and 0.30 points driven by higher pre-money valuations and strong exit activity.
• UK VC fund performance now follows a similar distribution to US VC funds. The shape of the UK TVPI distribution is almost identical to the US, until the top 3%, where US funds have substantially higher multiples.
• Fund managers are optimistic about quality of deal flow and exit conditions, but are reporting an increased level of competition for deals:
  • 97% of surveyed fund managers were positive on the quality of investments available, with 38% rating them as ‘very good’.
  • 93% of fund managers were positive on current exit conditions, with 72% of fund managers reporting improved conditions on last year.
  • 59% of fund managers reported high levels of competition for deals, with 59% also reporting increased competition over the past year.