Venture Capital Performance Positive in All Horizons Ending Q3 2007
29 January 2008 - 12:00AM
PR Newswire (US)
Economic Troubles Could Impact Returns in 2008 NEW YORK, Jan. 28
/PRNewswire-FirstCall/ -- Venture capital performance showed
positive returns across all investment horizons ending September
30, 2007, according to Thomson Financial and the National Venture
Capital Association. The one-year private equity performance index
(PEPI) showed the greatest increase from the period ending Q2 2007,
with an 8.8 point increase to 32.3% in Q3 2007. Oftentimes,
short-term horizons show significant fluctuations quarter over
quarter based on large exits impacting the return. The next largest
increase from Q2 2007 to Q3 2007 occurred in the five-year time
horizon where PEPI increased by 1.9 points quarter over quarter.
Ten year performance, the time horizon with the largest period over
period decline, showed a decrease from 19.3% to 17.9% in Q3 2007.
Three-year and twenty-year performance figures remained virtually
unchanged at 10.4% and 16.4%, respectively. The 10 and 20 year time
horizons continue to significantly out-perform the public markets
across all venture capital fund types. "The third quarter 2007
performance numbers are consistent with an asset class that
benefited from improving exit markets during the year, but still
had to contend with losses earlier in the decade," said Mark
Heesen, president of the NVCA. "We expect these numbers to continue
to trend positive for at least the next quarter as this past year
saw some strong IPO's and acquisitions that will support higher
returns in the short run. We continue to keep our eye on the
economy in 2008 as the threat of a recession could stall the
venture capital exit market -- and that could impact returns
negatively." Thomson Financials' US Private Equity Performance
Index (PEPI) Investment Horizon Performance through 9/30/2007 Fund
Type 1 Yr 3 Yr 5 Yr 10 Yr 20 Yr Early/Seed VC 23.6 6.8 3.1 34.5
20.8 Balanced VC 38.0 14.4 9.9 15.1 14.3 Later Stage VC 41.4 10.5
8.4 8.3 13.8 All Venture 32.3 10.4 6.7 17.9 16.4 NASDAQ 14.2 12.2
17.9 4.8 9.4 S&P 500 10.8 10.7 13.1 4.9 8.1 All Venture
(through 6/30/2007) 23.5 10.5 4.8 19.3 16.4 All Venture (through
9/30/2006) 8.2 9.3 -1.0 20.8 16.6 Source: Thomson
Financial/National Venture Capital Association *The Private Equity
Performance Index is based on the latest quarterly statistics from
Thomson Financials' Private Equity Performance Database analyzing
the cashflows and returns for over 1860 US venture capital and
private equity partnerships with a capitalization of $678 billion.
Sources are financial documents and schedules from Limited Partner
investors and General Partners. All returns are calculated by
Thomson Financial from the underlying financial cashflows. Returns
are net to investor after management fees and carried interest.
Thomson Financial, with 2006 revenues of US$2 billion, is a
provider of information and technology solutions to the worldwide
financial community. Through the widest range of products and
services in the industry, Thomson Financial helps clients in more
than 70 countries make better decisions, be more productive and
achieve superior results. Thomson Financial is part of The Thomson
Corporation (http://www.thomson.com/), a global leader in providing
essential electronic workflow solutions to business and
professional customers. With operational headquarters in Stamford,
Conn., Thomson provides value-added information, software tools and
applications to professionals in the fields of law, tax,
accounting, financial services, scientific research and healthcare.
The Corporation's common shares are listed on the New York and
Toronto stock exchanges (NYSE: TOC; TSX: TOC). The National Venture
Capital Association (NVCA) represents approximately 480 venture
capital and private equity firms. NVCA's mission is to foster
greater understanding of the importance of venture capital to the
U.S. economy, and support entrepreneurial activity and innovation.
According to a 2007 Global Insight study, venture-backed companies
accounted for 10.4 million jobs and $2.3 trillion in revenue in the
United States in 2006. The NVCA represents the public policy
interests of the venture capital community, strives to maintain
high professional standards, provides reliable industry data,
sponsors professional development, and facilitates interaction
among its members. For more information about the NVCA, please
visit http://www.nvca.org/. DATASOURCE: Thomson Financial; National
Venture Capital Association CONTACT: Emily Mendell of NVCA,
+1-610-565-3904, ; or Matthew Toole, +1-646-822-7560, , or Sandy
Anglin, +1-646-822-7334, , both of Thomson Financial Web site:
http://www.thomsonfinancial.com/ http://www.nvca.org/
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