Front Core Capital Predicts That VC Returns Continues to Improve 2011
Collective venture capital performance continues to move in the right direction as we are experiencing a further opening of the IPO window and a strong pace of favorable acquisitions, allowing venture funds to distribute a meaningful amount of cash to their limited partners.
- (1888PressRelease) May 26, 2011 - With the exception of the 15-year returns which declined slightly, venture capital performance improved from last quarter across all time horizons as of the end of the fourth quarter of 2010. The increase in returns marks a continued trend in which the improved exit markets and more favorable portfolio valuations are positively impacting venture performance for the first time since the recession of 2008. Venture capital performance also surpassed the public market indices for the quarter, 5-, 15- and 20-year time horizons as of the end of 2010.
Collective venture capital performance continues to move in the right direction as we are experiencing a further opening of the IPO window and a strong pace of favorable acquisitions, allowing venture funds to distribute a meaningful amount of cash to their limited partners. With short-term returns improving and a healthy start to 2011, we can expect these performance numbers to continue on a steady upward trajectory through the remainder of 2011 and beyond.
We observed a marked increase in distributions to LPs in the fourth quarter versus the third quarter, and combined with an increase in valuations, led to a nice quarterly return. Barring outside macro factors, we are hopeful that IPO and M&A exits will continue to fuel liquidity.
For example Front Core Capital sees that the 2004 vintage year funds have distributed cash of .26 times the amount of capital paid in by LPs. If you account for the current value of the existing portfolio of 1.04, the ratio increases to 1.30 times. However, it is important to note that the residual value is unrealized and will change as companies exit the portfolio, are revalued, or are written off.
The 1996 vintage year funds have the most positive ratio, returning 4.96 times the cash contributed by LPs, a number which rises to 5.03 should those funds realize the value of what is currently in the portfolio. More recent vintage years have yet to return significant cash to LPs as most funds do not begin returning capital until after year five.
- About Front Core Capital -
Front Core Capital is a Venture Capital and Financial service company. Front Core Capital caters to the expectations of knowledgeable and discerning investors who seek the highest return on their investments. Front Core Capital is a wholly independent company and, as such, is not restricted in any of the funds or investment products we may wish to utilize for our clients' wealth management and financial planning purposes.
- Press Contact at Front Core Capital -
Zach Amiran, press-contact ( @ ) frontcorecapital dot com
###
space
space
Satisfied Users & 
Approved Press Releases
Print
Email
Report Spam