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Bailey McCann, Opalesque New York:

Returns from venture funds globally reached a record high in Q4 2019 and remained strong in Q1 2020, despite the unfolding Covid-19 crisis, according to new data from eFront. 2019 was an exceptional year for venture capital performance, with funds globally recording an increase in aggregated multiple of invested capital (TVPI) of 10.5% year on year, reaching 1.632x in Q4 - a record high.

Active venture funds have capitalized on favorable macro-economic conditions and mirrored the significant uptick of listed stock prices. This represents the first time that the TVPI of active venture capital funds has broken the 1.6x threshold, setting another record high.

Risk, meanwhile, decreased, with the TVPI spread between best and worst performing funds falling to 1.721x in Q1 2020, down from 1.932x in Q3 2019.This relative stability signals that fund managers have collectively benefitted from supportive market conditions.

2020 will be a test for VC fund managers. The deviation might decrease as it did in 2016-2017 or confirm the increase of 2019, depending on the deployment of new capital and the evolution of valuations. The pandemic is also likely to have an impact as the slowdown in deal flow and exits will be reflected in Q1-Q2 2020 data. So far, 2020 confirms a trend initiated in 2019 towards longer holding periods, as managers take more time to......................

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