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Laxman Pai, Opalesque Asia: US-based venture capital funds have posted double-digit median net internal rate of return (IRR) from vintage 2010 onwards, said a report by Preqin.
The high of 18.9% for vintage 2016 funds indicates early increases in the unrealized value of these funds' underlying investments.
In fact, all vintages up to and inclusive of 2016 record positive returns for even the lower quartile net IRR boundary.
Returns for some vintage 2017 funds are expected to increase over time as these funds' investments mature in the coming years.
Both the annual capital called and distributed by US-based venture capital funds decreased in 2019 compared to 2018.
With $34bn called up and $21bn distributed over the year, net cash flow remained negative for the third consecutive year (-$13bn).
The fall in annual capital called represents the first decline since 2015, indicating fund managers may be waiting for more favorable market conditions before investing via their recent vintage funds.
Among vintage 2010-2017 funds, Column Group II is the top performer with a net IRR of 411.9% as of 30 June 2019.
This figure was achieved partly due to the significant early distributions made by the 2014 vintage fund, which has a net multiple of 2.30x.
The California-based fund primarily invests in the biotechnology industry within the US. The remainder of the top 10 performing funds is made up of six other North America-focused funds, two Asia-focused funds, and one fund with a diversified multi-regional focus.
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