1 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Performance Measurement Survey 2015

2 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

British Private Equity & Venture Capital Dynamics PricewaterhouseCoopers LLP Capital Association (BVCA) 9th Floor 7 More London Riverside 5th Floor East 9 Colmore Row London Chancery House Birmingham SE1 2RT 53-64 Chancery Lane B3 2BT London Tel: 020 7583 5000 WC2A 1QS Tel: 012 1200 8800 www.pwc.co.uk Tel: 020 7492 0400 www.capital-dynamics.com

[email protected] www.bvca.co.uk BVCABVCA PrivatePrivate EquityEquity andand VentureVenture CapitalCapital Performance Measurement Survey 2015 1

Contents

Overall performance Foreword 2

Highlights 3

Returns by investment stage – IRR and multiple 12

Returns by vintage year (1996 onwards) and investment stage – IRR and multiple 18

Range of returns Range of returns (IRR and multiple) since inception – investment stage and subcategory 21

Range of returns (IRR and multiple) since inception – vintage year 24

Range of returns (IRR and multiple) since inception – investment stage (1996 onwards) and vintage year 27

Capital raised and realised By investment stage and subcategory 30

By vintage year 31

Appendices Appendix I Methodology 33

Appendix II Glossary of terms 35

Appendix III Principal comparators and asset class overview 37

Appendix IV Range of returns (IRR) medium to long-term 39

Appendix V Since-inception range of returns – vintage year band and investment stage 43

Appendix VI Worked examples 54

Appendix VII List of responding managers 56

Appendix VIII Frequently asked questions 58 2 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Foreword

Despite ongoing headwinds of economic and political uncertainty, the UK’s private equity and venture capital industry has continued to demonstrate its resilience, outperforming its competitors and delivering consistently high returns to investors.

The BVCA Private Equity and Venture Capital This outperformance continues when we look Venture funds from 2002 onwards have performed The BVCA – The British Private Equity Performance Measurement Survey, produced at five year returns, where UK private equity particularly strongly, seeing their since-inception and Venture Capital Association – in association with PwC and Capital Dynamics, and venture capital generated an IRR of 10.2% returns increase to 7.0% in 2015, from 6.4% the is the most detailed and comprehensive study against returns for UK pension funds and the previous year. The growing strength of venture is the industry body for the UK private of its type. Drawing on a direct survey of the FTSE All-Share of 7.5% and 6.0% respectively. capital along with the continued high returns equity and venture capital industry. BVCA’s eligible members – 96% of whom The fund performance gap persists when looking from Small MBO funds highlight the importance Our membership of over 500 members responded this year – the survey contains at one and three-year returns. Such returns are of this industry in providing capital to developing represents the overwhelming majority information on 586 UK-managed funds, and we however, subject to considerable short-term firms and the key role this plays in the UK’s believe this makes it the most complete country- market volatility and private equity’s long-term economy recovering from the recent crisis. of UK-based private equity and venture specific survey on the performance of private horizon reduces its vulnerability to such volatility. capital providers and advisers as well equity and venture capital in the world. as fund investors. The BVCA has over The since-inception IRR is, however, the most 30 years of experience representing The ten-year annual internal rate of return appropriate metric to use when looking at the industry (which currently accounts (IRR) for the funds in the survey remains strong, performance. The grand total since inception for around 40% of the whole of the at 13.2%. This is marginally down on last year’s IRR for all the funds is 13.8%. This is within the corresponding figure (14.9%), but still far in historic performance band of around 13% and European market) to government, excess of the principal comparators such as UK 17%, and points to the enduring strength of the Alan Mackay the European Commission and pension funds and the FTSE All-Share, which industry and its ability to consistently deliver BVCA Chairman 2016-17, November 2016 Parliament, the media, regulatory produced returns over the same time frame high returns to investors. Venture capital funds and other statutory bodies at home, of 6.2% and 5.6% respectively. have had another strong year in 2015. The sector across Europe and around the world. has seen a steady upwards trend in performance in recent times and 2015 has the largest returns We promote the industry to entrepreneurs since 2003 and the tech bubble. and investors, as well as providing services and best-practice standards Damian Regan to our members. Private Equity Performance Assurance leader, PwC, November 2016 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015 3

Highlights

Despite the challenges that remain in the UK economy, such as low productivity and continued political uncertainty, the industry managed to capitalise on growth and generated one year IRRs for all funds covered in this survey of 8.7%. This compares favourably with Total UK Pension Fund Assets of 2.9% and FTSE All-Share of 1.0% for the same period.

Caution should always be adopted when Summary of UK Private Equity Performance versus Principal Comparators interpreting one year annual returns. While they provide a succinct snapshot of whether or not % p.a. that particular year was good or bad, the corresponding returns often swing significantly  from year to year, and the number does not reflect the actual return that investors receive. 14.2 In the case of 2015, UK private equity and  13.2 venture capital did comparatively very well.

Over the five and especially the ten-year time 10.2 horizon, UK private equity and venture capital  8.7 8.5 7.3 7.5 sustained its performance. Over both the last 6.06.0 6.2 five and ten years, private equity returns, are on 5.6 average, well ahead of the similar numbers that  2.9 can be seen for UK Pension Fund Assets and the FTSE All-Share index, as measured by State 1.0 Street Global Services Performance Services.  2015 Three years Five years Ten years

Total Private Equity Total Pension Funds Assets (State Street) FTSE All-Share 4 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Highlights

Continued

The since-inception metric measures the Since Inception Performance by Investment Stage and Subcategories to December 2015 - IRR (% p.a.) performance of private equity over the full lifecycle of the fund. When surveying the totality Subcategories (all vintages) of all funds raised before 2011, they generate a Pre-1996 vintage funds 1996 vintage funds onwards net IRR of 13.8%, which is consistent with last year’s corresponding value and still well within % p.a. Early Develop- Mid- Large Generalist Subtotal Venture Small Mid- Large Subtotal UK Non- Pan- Technology Non- Grand total Stage ment MBO MBO pre-1996 MBO MBO MBO 1996 UK European Technology all funds the typical range. (N.B. Funds raised from 2012 onwards onwards are not included in the computation of since-inception returns as these funds are still  at the early stage of their life cycle, and their 18.2 investment return during this period does not provide a significant indication of their 15.8 15.8 15.6 15.6 14.4 15.1 14.6 performance at liquidation).  14.0 13.8 13.2 13.5 The most recent funds – those which first drew 12.6 down their capital between 1996 and 2011 – continue to generate consistent and attractive 10.2 returns. The since-inception IRR generated by  9.1 this 365-strong group of funds was 13.2% p.a. as at December 2015. In recognition of the widespread changes within the UK industry, funds raised after 1996 were classified into 4.4  four investment stages: Venture, Small MBO, 3.7 Mid-MBO, and Large MBO. Consistent with a recent trend, the polar ends of the MBO investment space continue to outperform in an impressive fashion on a since-inception basis,  with Large MBO focused funds (14.4% IRR) being outperformed by Small MBO funds (15.6% IRR). Mid-MBO-focused funds continue to perform slightly below their pre-global financial crisis levels, but still returned a very healthy 12.6% to December 2015. BVCA Private Equity and Venture Capital Performance Measurement Survey 2015 5

While post 1996-vintage venture funds still Summary of Performance by Investment Stage and Subcategories suffer from a number of temporary and structural issues, recent funds (those with 1996 vintage funds onwards - IRR (% pa) a post-2002 vintage) appear to be continuing to mature and show improved performance, % p.a. with IRRs to December 2015 on a since-inception basis standing at 7.0% per annum. 

Given that the majority of the pre-1996 vintage funds have either been wound up or retain only minimal residual values, the net since-inception 23.5 22.3 IRR of these funds has remained at 15.6% p.a. for a number of years and is unlikely to materially  change in the future. 16.0 16.0 While performance over the short-term, namely 15.0 over the annual and three-year time horizon, 14.2 14.2 12.9 13.2 has been somewhat robust, analysing UK private 11.6 10.7 equity over the course of the last five years – 9.2 8.8 10.2 a period of remarkable change – and the  last decade paints a more complete picture. Post 1996-vintage funds within the Small and 5.1 Mid-MBO investment stages have performed well over the last 10 years, generating per annum (p.a.) returns near the 24% and 16% mark, respectively. Looking more closely at the last  five years, in particular, we see that post- 1996 Three years Five yearsTen years vintage Mid MBO funds have delivered strong returns at 15% IRR p.a. Venture Small MBO Mid MBO Large MBO Subtotal 1996 onwards 6 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Highlights

Continued

Across all vintage years, BVCA funds have raised Capital Raised by Investment Stage and Subcategory - December 2015 £222 billion for investment. Of the capital raised, £184 billion has been drawn down to date. This indicates an amount of around £38 billion Pre-1996 vintage funds 1996 vintage funds onwards Subcategories (all vintages) that is available for the industry to invest. Of the capital paid in, £219 billion has been returned £mn Early Develop- Mid- Large Gene- Subtotal Venture Pre- 2002 Small Mid- Large Subtotal UK Non- Pan- Tech Non- Grand total to investors and £74 billion is retained in the stage ment MBO MBO ralist pre-1996 2002 vintage MBO MBO MBO 1996 UK European Tech all funds vintage funds onwards portfolio. The total value (distribution plus residual funds onwards value) as a percentage of paid-in capital is 159%.  222,469 215,237 213,401

 181,614 179,081

 140,548



58,665  40,855

7,232 9,489 6,091 6,534 9,068 344 529 1,194 3,717 1,448 3,398  BVCA Private Equity and Venture Capital Performance Measurement Survey 2015 7

As of December 2015, the best performing fund Since Inception Return by Vintage Year to December 2015 vintages following the Dot-Com bubble on the since-inception measure were 2001 and 2011, generating pooled average IRRs of 25.0% and 30.4% per annum, respectively. This provides % p.a. further evidence that committing to the private 40 equity asset class during periods of macroeconomic recovery can deliver great returns to investors. 35 34.3 This is explored in detail in our range of returns analysis later on in the report. 30.4 30

25 23.4 25.0 24.4 23.5 23.1

20 20.3 19.8 17.6 17.9 16.6 15 13.7 15.1 15.0 13.8 12.9 11.5 11.3 10.5 11.1 10 9.5 9.4 10.0

5 4.6

0 1980 1985 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 200320022004 2005 2006 20082007 20092010 2011 Total –84 –89 8 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Highlights

Continued

Though always directly compared to the US Funds with a vintage at the height of the bubble, venture scene, which is itself unique in that it is between 1998 and 2001, have clearly endured highly sophisticated and mature, the UK venture a painful time, not least because of the inflated industry of today is the most comparatively valuations that were prevalent in both the well-developed ecosystem in Europe. The myths technology sector and venture capital industry and anecdotal stories of the European and indeed at the time. Very few venture houses on this side UK venture scene do not necessarily correspond of the Atlantic came out of the period unharmed, to the facts and body of analysis, as academic as large and unsustainable amounts of capital evidence1 suggests. flooded into the industry and depressed the real returns to investors. Within this context, it is not The analysis of purely commercial venture surprising that Dot-Com bubble-vintage funds funds shows that the sector has come out have returned a collective loss of, on average, of the Dot-Com bubble in a relatively mixed 1.6% per annum. fashion and still in some areas suffers from some of the bubble’s second-round effects. The 2002 to 2011 (post-bubble) fund vintages To provide a more holistic and balanced appear to be close to completing their recovery, assessment, we segment our funds into three with these funds having a 8.4% pooled since categories according to their respective vintage inception IRR this year and 7.7% last year. year bands, specifically, Pre-Bubble (1980 to 1997), However, whilst the sector is now generating Bubble (1998 to 2001) and Post-Bubble (2002 strong returns on average, the spread of returns to 2011). Funds raised prior to the Dot-Com is larger in venture than in private equity and boom have delivered a pooled average IRR this spread is increasing. Last year, post bubble of 11.8% per annum. funds had an inter-decile range of 33.9% which has risen to 66.6% this year. The median post bubble fund is also highly promising now returning 6.2% opposed to 4.2% last year.

1. Axelson, Ulf, and Martinovic, Milan (2013), ‘European Venture Capital: Myths and Facts’. Available online at: http://www.bvca.co.uk/assets/features/show/EuropeanVentureCapitalMythsandFacts BVCA Private Equity and Venture Capital Performance Measurement Survey 2015 9

Since Inception IRR (%) - Venture funds (purely commercial)

Subtotal Pre-bubble 1980–1997 Bubble 1998–2001 Post-bubble 2002–2011 No. of funds 67 32 24 11 Pooled average 4.7 11.8 -1.6 8.4 10th percentile 18.2 24.0 4.8 21.6 25th percentile 9.8 15.3 3.3 10.2 Median 3.6 9.0 -7.8 6.2 75th percentile -8.5 -2.1 -15.3 -3.2 90th percentile -20.3 -10.2 -34.1 -45.0 Inter-decile range 38.5 34.2 39.0 66.6 Range of returns 98.7 71.5 60.8 69.4 DPI 97.5 163.3 54.7 109.3 TVPI 121.7 165.4 89.0 139.4

*The table reports the returns of the venture funds with no restrictions in their investment strategy imposed by their investors for purposes other than return maximisation or risk management. These funds are at least four years old. The returns are on the since-inception basis and are annualised. 10 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Highlights

Continued

Private equity characteristics impending regulatory reforms such as Basel III dataset. As with the previous two years, we will all funds over the period 1 January 2004 to 31 The characteristics of private equity performance and Solvency II in Europe, and the Dodd-Frank produce a partner paper to this document outlining December 2015, regardless of whether the funds differ from other asset classes. Typically, private legislation in the US. The ‘secondaries market’, some of these measures and applying them to had been in existence for the whole of the equity fund investments show less correlation to as it is colloquially known, provides an opportunity the 2015 dataset. measured period). quoted public equity markets and are relatively for Limited Partners to liquidate or increase their Since inception Current year returns illiquid, particularly in the early years. Private exposure to private equity by buying or selling equity is a long-term investment, which, in the fund stakes to other investors in the asset class. This is the most meaningful way in which to One-year figures are extremely volatile and first few years, will normally show a drop in the measure private equity performance. It measures inappropriate as a realistic measure of private Methods of measurement net asset value before showing any significant from the start of a fund’s investment (i.e. from the equity performance, since it is largely not possible uplift. This is often the effect of management The primary method for calculating the return of fund’s first drawdown) up to a particular point to invest in a private equity fund for just one year. fees being paid out, as well as the costs of initial a private equity fund is based on the annualised in time. This therefore most closely reflects the They can, however, be used as an indication capital being deployed into companies. Private internal rate of return (IRR) achieved over a return an investor would achieve if they invested of how well the UK private equity industry equity offers institutional investors the opportunity period of time. This report measures performance at the start of the fund. performed in that one year. to further diversify their asset allocation with in predominantly two ways: by ‘since inception’ the prospect of stable yet attractive investment and ‘medium to long-term’ (over three, five, Medium to long-term returns. It does, however, have different and ten years). Medium to long-term figures are included in characteristics from quoted equity and it is crucial this report so that investors can compare private that an institutional investor considers the One of the unique and defining characteristics equity returns with those of other asset classes, appropriateness of private equity in relation to of private equity and venture capital is the very which is not possible with the ‘since inception’ their own particular risk profile and objectives. irregular timing of cashflows to and from the numbers. It is not, however, the most appropriate The life cycle of a private equity fund commitment fund. As such, the IRR is not strictly and directly way to measure private equity performance. is typically ten years or more. An investor will comparable with more standard measures of The returns quoted in the medium to long-term receive pro-rata distributions of capital during returns, namely buy-and-hold estimates of figures cover all activity of funds in the survey the life of the fund. There has been a substantial performance. In response to some of these over the measured period to 31 December 2015 secondary marketplace for private equity fund concerns about IRRs, alternative measures have – it is not limited to those funds that were in holdings for some time now and this is likely to also been proposed and developed and some of existence at the start of the measured period rise in prominence in the medium term given the these have already been applied to our Survey (e.g. the ten-year return covers all activity of BVCA Private Equity and Venture Capital Performance Measurement Survey 2015 11

Reclassification of investment stages for 1996 Fund multiples vintage funds onwards We began reporting fund multiples alongside To reflect changes in the market, which from the IRRs in the 2004 report. The multiples shown mid-1990s have seen the predominance of larger are: the total amount distributed to investors as funds, a ‘restart’ in the venture marketplace and a percentage of paid-in capital (DPI), and the the growing recognition of private equity as an total amount distributed plus the residual value asset class, 1996 vintage funds onwards were attributable to investors as a percentage of (as of the 2005 report) reclassified into four new paid-in capital (TVPI). investment stage categories: Venture, Small MBO (including development capital), Mid-MBO and Large MBO. Pre-1996 vintage funds remain in the previous stage categories (i.e. Early Stage, Development, Mid-MBO, Large MBO and Generalist). This is reflected in the tables accordingly. Please see Glossary of Terms for definitions.

Comparative figures are not available, other than for the subcategories of UK and Non-UK, Pan-European and Technology and Non- Technology, which apply to all vintages.

Pan-European funds From 2004 onwards, an extra subcategory was included, which is dedicated to pan-European UK-based funds. These funds invest, or intend to invest, in more than two European countries. 12 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Returns by investment stage – IRR and multiple

Private equity is in and of itself a long-term asset class, and over the long-term, both industry-related and independent academic research indicates that private equity performance is superior to other comparable asset classes. The performance of a private equity fund is influenced by a number of factors not least the investment stage and the vintage year. The measure of fund performance used throughout this report is the internal rate of return (IRR), which is based on managers’ discretionary portfolio cash flows and year-end valuations.

Since-inception IRR by investment stage Pre-1996 vintage funds 1996 vintage onwards Subcategories (all vintages) The performance of all funds, less those that As the majority of these funds have been fully Small and Large MBO funds raised subsequent Pan-European focused funds, once again, are not at least four years old (and therefore not wound up or retain only inconsequential residual to 1996 continue to outperform other investment delivered superior performance as compared yet sufficiently mature), from their inception to values, their since-inception return is largely stages, at 15.6% and 14.4% per annum respectively. to the other subcategories, generating an IRR December 2015, stood at 13.8% IRR per annum. based upon realised cash flows and value. They are closely followed by Mid-MBO funds, of 15.1% p.a. on a since-inception basis to This year’s since-inception performance is Performance, as at December 2015, has been which returned 12.6% p.a. as at December 2015. December 2015. Technology investment focused consistent with last year’s value, this is broadly robust across all investment stages with Large Venture funds, as a whole, have performed well funds increased their march into positive territory comparable with the average return achieved by MBO funds delivering 18.2% IRR p.a., followed on a relative basis. While pre-2002 vintage venture (generating an IRR of 4.4% as at December 2015) the industry as whole over the last decade or so. by Generalist and Mid-MBO funds which have funds continue to deliver losses, post-2002 and indeed display a notable trend in improvement Not only does the since-inception metric display both returned 15.8% to their investors. vintages improved their performance relative to post financial crisis. This is broadly consistent persistence and consistency over time around, on previous years, generating 7.0% per annum, as at with venture funds that, as we have seen, are average, the fifteen per cent mark, but the dataset December 2015. This is promising, as the vast displaying a strong improvement in their from which this has been achieved for this year majority of these funds are still in their formative underlying portfolios. is believed to be the most comprehensive in years and are yet to fully reach the harvesting terms of its coverage of UK-managed funds. phase within the fund itself. As venture managers deploy capital and actively manage the investee companies within their fund, this year’s return and indeed the resilience shown throughout the recent global financial crisis should provide them with a solid platform to generate strong returns over the course of the next few years. BVCA Private Equity and Venture Capital Performance Measurement Survey 2015 13

Since Inception Return - IRR (% pa) Investment Stage and Subcategories

No. of funds To Dec '15 To Dec '14 To Dec '13 To Dec '12 To Dec '11 To Dec '10 To Dec '09 To Dec '08 To Dec '07 To Dec '06 To Dec '05 To Dec '04 To Dec '03 To Dec '02 Pre-1996 vintage funds Early Stage 24 9.1 9.1 9.2 9.2 9.2 9.2 9.2 9.2 9.2 9.3 8.8 8.9 8.9 9.0 Development 35 10.2 10.2 10.2 10.2 10.2 10.2 10.2 10.2 10.2 10.2 10.0 10.0 10.0 10.1 Mid MBO 33 15.8 15.8 15.8 15.8 15.8 15.8 15.7 15.8 15.8 15.8 15.8 15.9 15.9 15.9 Large MBO 26 18.2 18.2 18.2 18.2 18.2 18.2 18.2 18.2 18.2 18.2 18.2 18.1 18.1 18.2 Generalist 35 15.8 15.8 15.8 15.8 15.8 15.8 15.8 15.8 15.8 15.6 15.6 15.5 15.6 15.6 Subtotal pre-1996 153 15.6 15.6 15.6 15.6 15.6 15.6 15.6 15.6 15.6 15.5 15.5 15.5 15.5 15.5 1996 vintage funds onwards Venture 117 3.7 3.4 2.4 0.4 0.9 -0.3 -2.2 -1.8 -1.6 -0.6 -1.9 -2.4 8.7 29.7 pre-2002 vintage funds 43 -0.2 0.1 -1.3 -2.6 -1.3 -1.6 -3.1 -2.6 n/a n/a n/a n/a n/a n/a 2002 vintage funds onwards 74 7.0 6.4 5.9 3.6 4.0 2.2 0.2 1.7 n/a n/a n/a n/a n/a n/a Small MBO 51 15.6 14.9 16.2 16.0 15.3 17.9 17.3 6.5 7.3 3.2 1.9 0.3 3.2 1.3 Mid MBO 148 12.6 12.6 12.6 12.3 12.5 13.2 14.0 14.9 14.9 13.2 9.3 5.9 4.3 3.6 Large MBO 49 14.4 14.3 14.9 14.7 15.4 17.8 19.2 21.5 23.7 21.0 18.0 13.9 14.3 16.5 Subtotal 1996 onwards 365 13.2 13.1 13.4 13.1 13.6 15.2 16.1 17.2 18.9 16.4 13.2 9.4 9.7 11.7 Grand total all funds 518 13.8 13.8 14.1 13.9 14.3 15.3 15.9 16.4 17.3 16.0 14.4 13.0 13.6 14.6 Subcategories (all vintages) UK 357 13.5 13.6 13.6 13.5 13.6 13.9 14.1 14.6 14.6 14.4 14.0 13.6 14.1 14.5 Non-UK 161 14.0 13.9 14.4 14.2 14.7 16.6 17.7 18.5 20.2 17.9 14.9 11.8 12.6 15.1 Pan-European 152 15.1 15.2 15.7 15.6 16.3 18.0 19.3 20.3 21.6 19.7 17.4 14.0 14.9 16.9 Technology 131 4.4 3.8 3.4 1.1 1.5 0.6 -0.9 -0.6 -0.1 1.0 0.1 0.9 7.4 10.7 Non-Technology 387 14.6 14.6 15.0 14.9 15.3 16.4 17.0 17.8 18.7 17.3 15.7 14.2 14.5 15.3 14 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Returns by investment stage – IRR and multiple

Continued

Fund multiples since inception 1996 vintage funds onwards Since Inception Return to Dec 2015 - Multiple to Paid-in Capital (%) – The multiples show the total amount distributed This subset of funds contains both relatively Investment Stage and Subcategory to investors as a percentage of paid-in capital mature funds with minimal residual values, No. of funds Distributions Multiple Total Value Multiple (DPI), and the total amount distributed plus and younger funds for which significant (DPI) (TVPI) the residual value attributable to investors as unrealised value is contained in their portfolios. Pre-1996 vintage funds a percentage of paid-in capital (TVPI). A DPI of As such, there is a large difference between 125.8% as at December 2015, indicates that BVCA the reported DPI and TVPI. On the narrower Early Stage 24 165.7 170.1 member funds (which are at least four years old) measure of DPI, we observe that Large and Development 35 170.9 171.3 have in aggregate returned all of the initial Mid MBOs are the dominant outperformers, Mid MBO 33 177.5 177.5 capital committed for investments and fees with both generating DPI multiples over 100%. Large MBO 26 192.3 192.4 back to their fund-investors, and a little more The much wider TVPI measure indicates all in addition. There is, however, a considerable three buyout stages, across small, mid and large, Generalist 35 242.1 243.1 amount of residual value present within these generated multiples of the order of around Subtotal pre-1996 153 197.1 197.5 portfolios, which will be liquidated and realised 150-160%. In aggregate, post-1996 vintage 1996 vintage funds onwards in due course. Taking account of this residual funds delivered, on a since-inception basis Venture 117 69.3 123.7 value, the total value (or TVPI multiple) yielded to December 2015, a TVPI multiple of 160.2% pre-2002 vintage funds 43 76.1 98.8 by these funds is 161.7% of the capital committed by fund-investors as at December 2015. 2002 vintage funds onwards 74 64.3 142.1 Small MBO 51 96.8 161.2 Pre-1996 vintage funds Mid MBO 148 119.8 159.2 Given that the majority of these funds are now Large MBO 49 128.5 163.1 fully liquidated and have been for some time, Subtotal 1996 onwards 365 122.7 160.2 the difference between the DPI and TVPI is infinitesimal. The return of 197.5% indicates Grand total all funds 518 125.8 161.7 that for every one GBP invested in private equity Subcategories (all vintages) and venture capital, investors received nearly UK 357 131.3 158.3 twice as much in return. Generalist funds Non-UK 161 124.5 162.5 delivered the greatest DPI and TVPI followed Pan-European 152 126.3 163.4 by Large MBOs, then Mid-MBO, Development capital and Early Stage funds. Technology 131 72.9 128.2 Non-Technology 387 128.0 163.2 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015 15

Medium to long-term IRR values, even a small number of positive exit Current year and longer term returns - IRR (% pa) by Investment Stage by investment stage events or write-offs can cause large swings in and Subcategory Over both the five and ten-year time horizons, their short-term returns. The weight of money UK private equity and venture capital once in this group now has little impact on the No. of funds 2015 Three years Five years Ten years again yielded solid returns, of 10.2% and 13.2%, returns of the total sample. Pre-1996 vintage funds* 153 -2.3 -2.6 -2.9 35.2 respectively. Over both timeframes, private 1996 vintage funds onwards 1996 vintage funds onwards equity’s performance was far superior to the Venture 132 9.1 16.0 9.2 5.1 Across the ten-year time horizon, robust returns delivered to investors in Total Pension pre-2002 vintage funds 43 0.4 19.5 4.3 -0.3 Funds Assets and the FTSE All-Share, according performance was noted over all three of the buyout stages with Small MBO being the 2002 vintage funds onwards 89 10.9 15.5 10.4 7.9 to data from State Street Global Services. dominant outperformer – generating IRRs of The headline three-year return has outperformed Small MBO 71 17.6 14.2 10.7 23.5 23.5% p.a. – and Mid and Large MBOs generating its principal comparators, with almost double Mid MBO 177 21.7 22.3 15.0 16.0 returns of 16.0% and 12.9% respectively. The Mid the return of the FTSE All-Share Index. All of the MBO stage was the notable outperformer across Large MBO 53 3.5 11.6 8.8 12.9 underlying investment stages have made strong both the short to medium-term time periods. Subtotal 1996 onwards 433 8.7 14.2 10.2 13.2 improvements throughout the last three years Equally encouraging are the returns generated and the global financial crisis, most notably in the Grand total all funds 586 8.7 14.2 10.2 13.2 from venture funds when the performance of Venture, Small and Mid -MBO spaces who delivered Subcategories (all vintages) 16.0% IRR per annum for the last three years is 16.0%, 14.2% and 22.3% IRRs, respectively. compared to the corresponding numbers from UK 407 11.9 16.7 12.6 11.5 the previous years’ surveys, as is the performance Non-UK 179 8.3 13.9 9.9 13.5 Current year IRR of post-2002 vintage fund across current year, Pan-European 171 8.0 13.9 9.9 13.4 Annual performance figures are highly volatile three-year and five-year time periods. Technology 143 13.3 18.8 10.6 5.8 and unsuitable as a realistic measure of private equity returns. Having said that, they do present Subcategories (all vintages) Non-Technology 443 8.4 14.0 10.2 13.7 a snapshot of activity in a given 12-month window. Over the ten-year time frame, the noteworthy This year, the annual IRR for the 586 funds * The time period returns for the pre-1996 vintage funds are shown only in their summary form and should be interpreted with outperformers are Pan-European and non-tech special care. As the majority of these funds have either been wound up or retain only minimal residual values, a small number covered in the survey was 8.7%. focused funds. Over the current year, three-year of positive exit events or write-offs can cause large swings in their short term returns. The weight of money in this group now and five-year time horizons, UK private equity has little impact on the returns of the total sample. Pre-1996 vintage funds outperforms its principal comparators. Indeed, The point-to-point returns for the pre-1996 the returns gap is significant over the vast vintage funds are shown only in their summary majority of the private equity subcategories, form and should be interpreted with special which consistently outperforms both the FTSE care. As the majority of these funds have either All-Share and the Total Pension Fund universe. been wound up or retain only minimal residual 16 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Returns by investment stage – IRR and multiple

Continued

Since-inception return – IRR (% p.a.) by vintage year

No. of funds To Dec '15 To Dec '14 To Dec '13 To Dec '12 To Dec '11 To Dec '10 To Dec '09 To Dec '08 To Dec '07 To Dec '06 To Dec '05 To Dec '04 To Dec '03 To Dec '02 1980-84 13 9.5 9.5 9.5 9.5 9.5 9.5 9.5 9.5 9.5 9.5 9.5 9.5 9.5 9.5 1985-89 68 13.7 13.7 13.7 13.7 13.7 13.7 13.7 13.8 13.8 13.8 13.8 13.8 13.8 13.8 1990 13 11.3 11.3 11.3 11.3 11.3 11.3 11.3 11.4 11.3 11.3 11.1 11.1 11.1 11.6 1991 14 23.4 23.4 23.4 23.4 23.4 23.4 23.4 23.4 23.4 23.4 23.4 23.3 23.3 23.3 1992 7 20.3 20.3 20.3 20.3 20.3 20.3 20.3 20.3 20.3 20.3 20.3 20.3 20.2 20.1 1993 10 15.1 15.1 15.1 15.1 15.1 15.2 15.0 15.2 15.3 15.3 14.8 14.0 14.6 14.6 1994 19 34.3 34.3 34.3 34.3 34.3 34.3 34.3 34.3 34.3 34.3 34.4 34.4 34.3 34.3 1995 9 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 22.2 21.9 21.9 21.8 22.8 1996 13 17.6 17.6 17.6 17.6 17.6 17.8 17.8 19.1 18.7 18.7 18.6 18.5 19.0 20.1 1997 24 15.0 15.1 15.0 15.0 15.0 15.0 15.1 15.3 15.6 14.7 14.9 14.3 14.3 13.7 1998 16 12.9 12.9 12.9 12.8 12.9 12.8 12.9 12.9 12.5 12.2 10.8 10.6 9.3 6.3 1999 25 11.5 9.9 9.5 9.4 9.7 8.6 8.0 8.0 15.8 8.8 6.2 1.5 -2.0 n/a 2000 26 16.6 16.7 16.6 16.6 16.6 16.6 16.2 14.1 16.7 14.9 8.7 4.8 n/a n/a 2001 30 25.0 25.0 25.1 24.8 25.2 26.1 26.6 27.4 29.1 28.3 23.4 n/a n/a n/a 2002 19 24.4 24.9 24.7 25.5 26.1 26.1 25.5 27.0 30.8 26.6 27.7 n/a n/a n/a 2003 18 19.8 20.0 20.4 20.7 22.0 23.7 17.5 25.4 32.1 23.4 22.2 n/a n/a n/a 2004 12 17.9 24.7 24.2 25.0 26.4 32.0 34.1 41.3 41.1* 25.8 -5.8 n/a n/a n/a 2005 27 10.5 11.1 11.1 9.6 7.4 9.4 8.4 4.2 19.4 24.0 -8.0 n/a n/a n/a 2006 38 4.6 5.2 6.2 4.2 2.4 5.2 -11.8 -12.7 7.2 100.6 n/a n/a n/a n/a 2007 39 9.4 9.2 9.7 7.9 8.9 12.6 5.1 4.1 24.7 n/a n/a n/a n/a n/a 2008 24 10.0 7.8 8.1 7.6 7.8 5.8 -5.7 -2.5 n/a n/a n/a n/a n/a n/a 2009 20 11.1 -2.1 9.2 4.0 -10.4 8.7 15.5 n/a n/a n/a n/a n/a n/a n/a 2010 17 23.5 25.6 23.3 18.7 37.9 140.8 n/a n/a n/a n/a n/a n/a n/a n/a 2011 17 30.4 38.8 44.4 70.7 -36.9 n/a n/a n/a n/a n/a n/a n/a n/a n/a Total* 518 13.8 13.8 14.1 13.9 14.3 15.3 15.9 16.4 17.3 16.0 14.4 13.0 13.6 14.6 2012 14 22.6 1.9 -9.7 -32.6 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 2013 18 21.9 -3.6 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 2014 18 2.5 7.0 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 2015 18 -59.4 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a Subtotal 2012-2015 68 19.8 26.0 29.2 12.4 6.0 11.5 -6.3 -2.1 18.2 27.9 n/a n/a n/a n/a

* The ‘total’ figures for each year end are based on funds that were at least four years old at the relevant year end. BVCA Private Equity and Venture Capital Performance Measurement Survey 2015 17

Since-inception return to Dec 2015 – multiple to paid-in capital (%) by vintage year Medium to long-term return – IRR (% p.a.) by vintage year

No. of funds Distributions Multiple (DPI) Total Value Multiple (TVPI) No. of funds 2015 Three years Five years Ten years 1980-84 13 205.6 205.6 1980-84 13 n/a n/a n/a n/a 1985-89 68 183.9 185.1 1985-89 68 0.0 2.0 0.4 3.0 1990 13 156.8 156.8 1990 13 0.0 0.0 0.0 n/a 1991 14 186.0 186.0 1991 14 0.0 0.0 0.0 0.0 1992 7 193.1 193.1 1992 7 0.0 0.0 0.0 0.0 1993 10 194.5 194.7 1993 10 -9.6 1.2 -0.5 42.5 1994 19 265.0 265.2 1994 19 -21.2 -25.6 -14.4 -12.1 1995 9 192.0 192.1 1995 9 0.0 0.0 -4.4 n/a 1996 13 190.0 190.2 1996 13 -1.8 11.6 -28.7 n/a 1997 24 167.8 168.1 1997 24 n/a -0.3 -4.7 23.0 1998 16 177.2 177.7 1998 16 -7.1 n/a 19.4 57.0 1999 25 166.8 171.7 1999 25 -42.7 11.4 17.1 33.6 2000 26 187.1 193.4 2000 26 13.3 22.9 18.2 32.1 2001 30 192.5 200.3 2001 30 -1.2 39.3 -1.4 28.9 2002 19 171.1 177.1 2002 19 n/a -7.5 -6.4 20.2 2003 18 167.6 177.6 2003 18 5.5 8.4 4.5 20.6 2004 12 178.9 195.6 2004 12 -20.9 10.6 6.5 23.3 2005 27 128.4 163.6 2005 27 -2.7 16.1 12.7 10.7 2006 38 83.2 127.4 2006 38 -3.0 9.8 8.1 n/a 2007 39 103.9 151.4 2007 39 13.7 12.0 8.3 n/a 2008 24 75.7 139.9 2008 24 3.3 12.2 10.5 n/a 2009 20 68.8 138.2 2009 20 n/a 16.2 11.3 n/a 2010 17 70.3 181.8 2010 17 16.2 28.0 18.5 n/a 2011 17 76.0 173.7 2011 17 11.3 25.0 n/a n/a Total 518 125.8 161.7 2012 14 38.6 24.4 n/a n/a 2013 18 44.4 n/a n/a n/a 2014 18 5.0 n/a n/a n/a 2015 18 n/a n/a n/a n/a Total 586 8.7 14.2 10.2 13.2 18 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Returns by vintage year (1996 onwards) and investment stage – IRR and multiple

Since-inception return to Dec 2015 – IRR (% p.a.) by vintage year and investment stage

Small/Mid MBO - to Dec '15 Mid/Large MBO - to Dec '15 Venture - to Dec '15 No. of funds IRR (% p.a.) No. of funds IRR (% p.a.) No. of funds IRR (% p.a.) 1996 11 12.4 10 18.0 0 n/a 1997 12 6.9 12 14.7 10 21.0 1998 11 6.7 12 13.2 1 -7.9 1999 12 10.0 15 12.1 9 -1.2 2000 13 17.8 12 20.9 11 -4.3 2001 13 26.2 16 26.5 12 1.0 2002 6 29.5 7 31.6 12 -1.6 2003 10 21.7 10 21.7 6 4.6 2004 7 11.6 9 18.3 2 -3.2 2005 14 7.9 18 10.8 7 8.5 2006 21 4.8 19 4.3 11 9.1 2007 22 10.0 23 9.5 12 8.7 2008 13 12.0 13 9.8 6 6.1 2009 11 9.1 8 11.1 8 12.8 2010 12 24.7 5 25.3 5 4.2 2011 11 37.1 8 32.9 5 14.5 Total 199 12.8 197 13.8 117 3.7 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015 19

Since-inception return to Dec 2015 – multiple to paid-in capital (%) by vintage year and investment stage

Small/Mid MBO - to Dec '15 Mid/Large MBO - to Dec '15 Venture - to Dec '15 No. of funds Distributions (DPI) Total Value (TVPI) No. of funds Distributions (DPI) Total Value (TVPI) No. of funds Distributions (DPI) Total Value (TVPI) 1996 11 161.0 161.2 10 192.4 192.5 0 n/a n/a 1997 12 137.1 137.1 12 171.5 171.8 10 159.9 160.5 1998 11 138.9 139.8 12 179.6 180.1 1 55.6 55.6 1999 12 145.7 158.7 15 171.2 175.8 9 81.3 92.6 2000 13 169.7 175.3 12 216.3 218.4 11 40.1 68.4 2001 13 199.3 213.7 16 198.7 204.7 12 71.2 107.3 2002 6 224.0 226.2 7 195.7 198.1 12 72.1 92.6 2003 10 179.1 188.6 10 171.4 181.1 6 116.1 128.5 2004 7 157.6 162.8 9 181.7 197.9 2 26.3 79.3 2005 14 111.6 142.7 18 129.9 164.7 7 93.6 160.0 2006 21 69.3 126.7 19 84.4 125.4 11 52.6 165.3 2007 22 104.4 151.1 23 106.3 151.6 12 62.5 150.1 2008 13 93.4 143.2 13 75.4 139.5 6 12.1 131.3 2009 11 57.4 133.6 8 72.2 137.2 8 42.6 154.3 2010 12 74.8 186.8 5 75.9 187.9 5 8.9 113.2 2011 11 93.8 181.9 8 83.1 176.9 5 75.0 148.4 Total 199 117.9 159.3 197 126.1 162.0 117 69.3 123.7 20 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Returns by vintage year (1996 onwards) and investment stage – IRR and multiple Continued

Medium to long-term return – IRR (% p.a.) by vintage year and investment Stage

Small/Mid MBO Mid/Large MBO Venture No. of funds Three years Five years No. of funds Three years Five years No. of funds Three years Five years 1996 11 4.9 1.2 10 8.7 -29.4 0 n/a n/a 1997 12 n/a 27.3 12 -3.5 -1.5 10 6.0 -7.8 1998 11 -17.4 -24.0 12 64.3 19.5 1 52.7 17.4 1999 12 -0.2 n/a 15 11.6 18.1 9 9.7 3.6 2000 13 -0.7 2.2 12 34.5 28.9 11 15.5 4.3 2001 13 10.0 3.5 16 42.4 -1.6 12 25.8 4.5 2002 6 -5.5 9.0 7 -8.8 -7.4 12 -4.1 -3.4 2003 10 17.1 16.0 10 6.8 3.6 6 21.2 7.2 2004 7 30.2 17.4 9 10.5 6.6 2 18.4 7.8 2005 14 9.2 5.9 18 15.8 12.7 7 32.6 15.8 2006 21 19.3 9.4 19 9.7 8.0 11 11.2 11.4 2007 22 20.7 15.5 23 12.0 8.2 12 13.6 9.6 2008 13 14.7 13.9 13 12.2 10.5 6 8.9 6.7 2009 11 13.3 8.1 8 15.6 11.4 8 26.2 15.1 2010 12 29.3 19.2 5 33.9 25.0 5 8.8 5.1 2011 11 45.2 37.1 8 26.2 32.9 5 19.5 14.5 2012 10 37.0 32.7 6 23.2 21.7 3 19.9 16.5 2013 11 43.6 43.6 10 28.8 23.2 5 7.7 7.7 2014 14 3.0 3.0 7 1.3 1.3 4 -2.0 -2.0 2015 14 -30.1 -30.1 10 -64.3 -64.3 3 -17.1 -17.1 Total 248 21.4 14.6 230 14.1 10.2 132 16.0 9.2 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015 21

Range of returns (IRR and multiple) since inception – investment stage and subcategory

Range of returns IRR (%) by investment stage and subcategory Since inception to December 2015

Pre-1996 vintage funds 1996 vintage funds onwards Subcategories (all vintages) Sub- Early Develop- Mid- Large Generalist Sub- Venture Venture Venture Small Mid Large Total UK Non-UKPan Tech- Non total stage ment MBO MBO total pre-2002 2002 MBO MBO MBO Euro- nology Tech- % p.a. % p.a. onwards % p.a. pean nology 80 80 80

60 60 60

40 40 40

20 20 20 Pooled average

10th percentile 0 0 0

25th percentile -20 -20 -20 Median

75th percentile -40 -40 -40

90th percentile -60 -60 -60

No. of funds 153 24 35 33 26 35 365 117 43 74 51 148 49 518 357 161 152 131 387 Pooled average 15.6 9.1 10.2 15.8 18.2 15.8 13.2 3.7 -0.2 7.0 15.6 12.6 14.4 13.8 13.5 14.0 15.1 4.4 14.6 10th percentile 27.0 19.5 16.9 33.2 44.5 24.3 34.5 18.1 8.5 19.3 48.1 43.5 33.5 33.0 31.5 35.5 42.4 18.7 36.7 25th percentile 17.6 15.3 11.8 22.0 26.3 15.3 17.7 6.2 4.4 10.1 21.1 23.1 22.5 17.6 16.9 19.3 22.7 11.1 21.1 Median 9.6 9.0 5.1 13.8 18.0 8.7 8.0 -1.3 -4.2 -0.3 7.1 10.8 14.3 8.6 8.0 10.4 10.9 2.6 10.0 75th percentile 3.7 2.8 -5.5 5.5 9.4 2.5 -2.7 -8.4 -12.1 -6.9 -3.4 1.4 8.8 -0.7 -1.2 0.1 3.9 -7.2 1.3 90th percentile -6.4 -6.0 -11.0 1.5 0.8 -5.7 -9.6 -19.9 -20.2 -19.4 -7.4 -6.2 4.0 -8.6 -8.7 -8.3 -7.5 -18.4 -7.1 Inter-decile range 33.4 25.5 28.0 31.7 43.7 30.0 44.2 38.0 28.7 38.7 55.5 49.7 29.5 41.6 40.2 43.8 49.9 37.1 43.8 Range of returns 111.6 52.9 63.0 47.6 66.9 111.6 161.9 98.7 98.7 89.2 107.7 129.0 139.8 161.9 161.9 126.5 139.8 98.7 161.9 22 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Range of returns (IRR and multiple) since inception – investment stage and subcategory Continued

Range of returns (multiple) by investment stage and subcategory (%) Since inception to December 2015 Distributions (DPI)

Pre-1996 vintage funds 1996 vintage funds onwards Subcategories (all vintages) Total Early Develop- Mid- Large Generalist Sub- Venture Venture Venture Small Mid Large Total UK Non-UKPan Tech- Non stage ment MBO MBO total pre-2002 2002 MBO MBO MBO Euro- nology Tech- % p.a. % p.a. onwards % p.a. pean nology

  500

  400

  300

Pooled average

10th percentile   200

25th percentile

Median   100 75th percentile

90th percentile   0

No. of funds 153 24 35 33 26 35 365 117 43 74 51 148 49 518 357 161 152 131 387 Pooled average 197.1 165.7 170.9 177.5 192.3 242.1 122.7 69.3 76.1 64.3 96.8 119.8 128.5 125.8 131.3 124.5 126.3 72.9 128.0 10th percentile 270.5 325.7 266.3 250.4 254.7 315.1 246.2 136.2 149.2 128.6 258.9 291.3 254.3 253.1 259.2 247.7 262.1 215.6 262.4 25th percentile 217.9 228.0 170.8 207.9 206.6 246.4 160.3 80.8 109.3 59.6 121.7 190.9 201.7 182.8 180.9 183.6 198.8 136.3 190.6 Median 159.9 167.2 125.8 160.4 185.2 174.9 88.1 30.8 49.6 23.8 65.4 129.5 159.7 117.7 119.4 110.3 127.8 49.6 134.2 75th percentile 117.7 94.1 68.3 124.5 140.2 125.3 27.8 10.2 26.0 3.4 22.6 65.6 96.4 46.4 42.9 48.8 48.6 16.6 66.0 90th percentile 64.4 24.7 42.9 107.4 99.5 65.1 2.8 0.0 11.2 0.0 0.6 25.1 24.8 10.4 10.4 8.7 11.6 0.0 20.3 Inter-decile range 206.1 300.9 223.4 143.0 155.1 250.0 243.4 136.2 138.0 128.6 258.3 266.2 229.5 242.7 248.8 239.0 250.5 215.6 242.1 Range of returns 538.6 511.0 491.6 264.6 399.9 522.4 1002.8 222.2 200.8 222.2 723.0 1002.8 337.5 1002.8 1002.8 723.0 723.0 511.0 1002.8 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015 23

Range of returns (multiple) by investment stage and subcategory (%) Since inception to December 2015 Total Value (TVPI)

Pre-1996 vintage funds 1996 vintage funds onwards Subcategories (all vintages) Total Early Develop- Mid- Large Generalist Sub- Venture Venture Venture Small Mid Large Total UK Non-UKPan Tech- Non stage ment MBO MBO total pre-2002 2002 MBO MBO MBO Euro- nology Tech- % p.a. % p.a. onwards % p.a. pean nology 500 500 500

400 400 400

300 300 300

Pooled average

10th percentile 200 200 200

25th percentile

Median 100 100 100 75th percentile

90th percentile 0 0 0

No. of funds 153 24 35 33 26 35 365 117 43 74 51 148 49 518 357 161 152 131 387 Pooled average 197.5 170.1 171.3 177.5 192.4 243.1 160.2 123.7 98.8 142.1 161.2 159.2 163.1 161.7 158.3 162.5 163.4 128.2 163.2 10th percentile 270.5 325.7 266.3 250.4 254.7 315.1 261.0 177.4 153.5 211.6 271.7 293.3 265.3 262.9 264.6 260.8 268.1 239.3 266.8 25th percentile 217.9 228.0 170.8 207.9 206.6 246.4 179.7 140.9 127.4 154.0 171.4 204.8 213.5 191.2 189.5 202.4 217.9 170.4 200.6 Median 160.2 173.7 125.8 160.4 185.2 174.9 139.8 89.0 69.2 99.5 128.5 151.3 174.3 144.2 142.0 154.6 164.7 115.9 147.9 75th percentile 119.4 114.9 69.4 124.5 140.2 125.3 83.7 49.0 41.1 66.5 77.1 107.3 144.1 93.5 90.3 103.3 118.5 62.2 106.2 90th percentile 68.7 64.8 42.9 107.4 99.5 65.1 46.5 25.0 22.3 32.2 49.1 76.6 116.9 52.6 47.4 57.8 61.5 26.3 63.6 Inter-decile range 201.7 260.9 223.4 143.0 155.1 250.0 214.5 152.5 131.1 179.5 222.6 216.8 148.4 210.2 217.1 203.0 206.6 213.0 203.1 Range of returns 532.2 504.6 491.6 264.6 399.3 522.4 1669.8 610.1 195.3 603.4 723.1 1669.8 333.3 1669.8 1669.8 723.1 723.1 610.1 1669.8 24 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Range of returns (IRR and multiple) since inception – vintage year

Range of returns – IRR (%) by vintage year Since inception to December 2015

Total 1980–84 1985–89 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 % p.a. 80

60

40

Pooled average 20

10th percentile

25th percentile 0

Median -20 75th percentile

90th percentile -40

Total 1980-84 1985-89 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 No. of funds 518 13 68 13 14 7 10 19 9 13 24 16 25 26 30 19 18 12 27 38 39 24 20 17 17 Pooled average 13.8 9.5 13.7 11.3 23.4 20.3 15.1 34.3 23.1 17.6 15.0 12.9 11.5 16.6 25.0 24.4 19.8 17.9 10.5 4.6 9.4 10.0 11.1 23.5 30.4 10th percentile 33.0 19.9 21.9 35.4 38.2 n/a 27.2 51.6 n/a 41.0 57.5 25.8 20.1 25.9 41.0 50.9 45.4 61.1 24.0 21.1 25.1 62.1 42.1 55.7 44.3 25th percentile 17.6 14.7 15.7 24.2 27.8 22.0 15.4 33.7 12.4 21.2 12.9 16.9 15.0 14.5 32.1 13.2 24.0 35.1 18.2 10.1 13.3 12.6 21.3 21.4 22.6 Median 8.6 8.1 8.8 8.9 16.8 20.2 5.3 13.8 1.9 10.0 6.8 3.9 4.4 1.0 16.7 0.0 9.3 13.2 5.7 4.2 9.9 10.9 8.3 12.5 14.3 75th percentile -0.7 4.1 3.8 2.8 4.3 11.0 -3.0 8.0 -6.8 -7.2 -3.0 -3.7 -3.9 -8.5 -7.3 -11.2 -1.6 -2.3 -7.3 -0.6 2.6 1.1 -4.0 -1.8 -2.9 90th percentile -8.6 -21.1 -7.0 -2.1 -14.7 n/a -9.2 2.0 n/a -25.5 -13.0 -14.1 -10.6 -20.1 -15.9 -19.9 -8.7 -16.5 -14.0 -5.9 -1.8 -7.9 -11.5 -20.2 -10.0 Inter-decile range 41.6 41.0 29.0 37.5 52.9 n/a 36.4 49.6 n/a 66.5 70.5 39.8 30.7 45.9 57.0 70.8 54.1 77.6 38.0 27.0 26.8 69.9 53.6 76.0 54.3 Range of returns 161.9 56.8 67.6 39.4 61.3 31.2 37.5 51.6 91.9 83.2 97.6 62.7 79.3 101.4 82.8 86.3 88.1 87.4 89.9 89.1 73.0 138.0 66.6 135.8 95.1 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015 25

Range of returns – multiple (%) by vintage year Since inception to December 2015 Distributions (DPI)

Total 1980–84 1985–89 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 % p.a. 500

400

300

Pooled average

10th percentile 200

25th percentile

Median 100 75th percentile

90th percentile 0

Total 1980-84 1985-89 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 No. of funds 518 13 68 13 14 7 10 19 9 13 24 16 25 26 30 19 18 12 27 38 39 24 20 17 17 Pooled average 125.8 205.6 183.9 156.8 186.0 193.1 194.5 265.0 192.0 190.0 167.8 177.2 166.8 187.1 192.5 171.1 167.6 178.9 128.4 83.2 103.9 75.7 68.8 70.3 76.0 10th percentile 253.1 440.7 286.6 281.3 276.1 n/a 249.9 321.1 n/a 282.9 224.9 308.3 204.5 245.1 364.7 269.2 258.0 371.8 204.9 190.5 278.9 271.7 215.3 434.0 221.2 25th percentile 182.8 251.3 216.3 205.0 203.3 223.8 175.6 226.8 203.2 200.5 177.9 206.9 178.6 154.8 223.3 129.5 183.6 274.5 152.7 102.8 128.0 118.9 102.0 102.3 96.8 Median 117.7 192.5 173.7 160.9 158.9 188.7 122.7 157.3 107.2 144.1 121.3 123.1 126.9 75.4 167.9 36.8 142.0 186.7 88.8 64.3 78.7 61.7 44.7 25.2 12.0 75th percentile 46.4 133.7 119.5 109.2 123.8 139.6 82.5 134.5 79.4 51.5 85.3 73.8 56.2 30.4 55.7 16.1 77.8 62.1 24.8 24.9 24.1 9.7 3.3 7.7 0.3 90th percentile 10.4 48.2 46.5 85.8 55.1 n/a 36.5 106.0 n/a 20.9 53.2 31.5 9.9 11.7 20.7 0.0 11.2 8.0 0.0 6.8 7.9 0.0 0.0 0.0 0.0 Inter-decile range 242.7 392.5 240.1 195.5 221.0 n/a 213.4 215.2 n/a 262.0 171.8 276.8 194.5 233.4 344.0 269.2 246.8 363.8 204.9 183.7 271.0 271.7 215.3 434.0 221.2 Range of returns 1002.8 491.7 511.0 208.2 272.7 178.1 220.0 353.7 496.9 303.5 244.3 441.1 282.2 343.4 551.1 352.1 260.7 397.5 335.9 251.2 560.1 723.0 350.8 1002.8 242.2 26 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Range of returns (IRR and multiple) since inception – vintage year Continued

Range of returns – multiple (%) by vintage year Since inception to December 2015 Total Value (TVPI)

Total 1980–84 1985–89 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 % p.a. 600

500

400

Pooled average 300

10th percentile

25th percentile 200

Median 100 75th percentile

90th percentile 0

Total 1980-84 1985-89 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 No. of funds 518 13 68 13 14 7 10 19 9 13 24 16 25 26 30 19 18 12 27 38 39 24 20 17 17 Pooled average 161.7 205.6 185.1 156.8 186.0 193.1 194.7 265.2 192.1 190.2 168.1 177.7 171.7 193.4 200.3 177.1 177.6 195.6 163.6 127.4 151.4 139.9 138.2 181.8 173.7 10th percentile 262.9 440.7 286.6 281.3 276.1 n/a 249.9 321.1 n/a 282.9 225.7 308.3 234.7 245.3 364.9 269.2 258.0 372.2 252.3 233.7 278.9 504.5 270.6 567.4 280.1 25th percentile 191.2 251.3 216.3 205.0 203.3 223.8 175.6 226.8 203.3 200.5 178.9 207.6 179.4 157.8 223.4 154.0 192.0 280.4 194.5 166.6 171.3 171.2 177.6 202.5 179.6 Median 144.2 192.5 176.9 160.9 158.9 188.7 122.7 158.7 107.2 144.1 122.8 123.2 127.4 105.6 176.7 76.4 149.1 210.3 144.1 127.1 149.5 144.6 131.8 140.0 136.5 75th percentile 93.5 133.7 120.1 109.2 123.8 139.6 82.8 134.5 79.7 54.6 85.3 75.6 68.4 48.7 71.4 34.6 90.0 94.0 60.7 95.7 111.1 105.1 84.8 96.0 89.3 90th percentile 52.6 48.2 59.4 85.8 55.1 n/a 44.2 119.4 n/a 21.2 53.2 31.6 39.4 20.7 41.4 13.4 64.7 20.8 40.3 69.4 67.0 35.2 65.3 55.1 69.5 Inter-decile range 210.2 392.5 227.1 195.5 221.0 n/a 205.7 201.7 n/a 261.7 172.5 276.8 195.3 224.6 323.4 255.9 193.3 351.5 212.0 164.3 211.9 469.3 205.4 512.4 210.6 Range of returns 1669.8 491.7 504.6 208.2 272.7 178.1 211.5 353.7 496.9 303.5 244.3 440.9 259.6 343.4 547.0 352.1 254.1 398.2 372.4 253.6 560.1 723.1 306.0 1660.0 395.3 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015 27

Range of returns (IRR and multiple) since inception – investment stage (1996 onwards) and vintage year

Range of returns – IRR (%) by investment stage and vintage year Since inception to December 2015

Small/Mid-MBO Mid/Large MBO Venture

Total* 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 201020092008 2011 Total* 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 201020092008 2011 Total* 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 201020092008 2011 % p.a. % p.a. % p.a. 100 100 100

80 80 80

60 60 60

40 40 40

20 20 20

0 0 0

Pooled average -20 -20 -20

10th percentile -40 -40 -40 25th percentile -60 -60 -60 Median

75th percentile -80 -80 -80

90th percentile -100 -100 -100

No. of funds 199 11 12 13 13 6 10 7 14 21 22 13 11 12 11 197 12 15 12 16 7 10 9 18 19 23 13 8 5 8 117 1 9 11 12 12 6 2 7 11 12 6 8 5 5 Pooled average 12.8 6.7 10.0 17.8 26.2 29.5 21.7 11.6 7.9 4.8 10.0 12.0 9.1 24.7 37.1 13.8 13.2 12.1 20.9 26.5 31.6 21.7 18.3 10.8 4.3 9.5 9.8 11.1 25.3 32.9 3.7 n/a -1.2 -4.3 1.0 -1.6 4.6 n/a 8.5 9.1 8.7 6.1 12.8 4.2 14.5 10th percentile 43.4 31.7 20.8 41.0 60.1 n/a 61.0 n/a 39.8 33.9 31.8 75.1 48.4 83.8 65.9 39.9 21.9 25.4 42.5 47.7 n/a 61.0 n/a 37.2 20.9 31.2 62.1 n/a n/a n/a 18.1 n/a n/a 4.5 5.8 7.6 n/a n/a n/a 20.6 17.3 n/a n/a n/a n/a 25th percentile 22.4 9.4 15.9 21.9 39.9 53.5 33.7 50.2 18.9 9.7 20.2 45.9 23.6 30.4 26.0 22.9 16.9 17.5 23.0 34.8 50.9 33.7 42.9 18.9 10.0 19.9 11.9 21.0 72.6 34.3 6.2 n/a 4.2 1.8 -1.3 4.0 4.2 n/a 18.2 10.2 12.6 17.2 21.3 13.5 20.3 Median 10.4 0.0 10.3 7.1 27.6 22.4 17.1 9.6 4.1 4.2 10.9 11.4 8.5 14.4 15.9 11.1 8.0 10.6 16.0 27.3 31.6 18.1 27.3 10.4 7.2 10.7 11.1 9.9 13.4 15.1 -1.3 n/a -4.2 -8.4 -7.6 -6.7 -2.1 n/a -7.4 0.1 6.4 1.9 4.8 5.3 -0.8 75th percentile 0.0 -4.3 -2.6 -2.4 21.1 8.1 7.3 -4.4 -3.2 -0.3 3.8 6.4 1.3 3.0 -0.1 4.3 -2.0 -2.6 -0.8 19.8 10.7 7.3 8.0 -1.6 -0.5 7.2 4.7 6.4 12.3 -0.5 -8.4 n/a -8.6 -20.0 -15.3 -17.7 -9.9 n/a -37.4 -1.7 -1.0 -1.5 -8.1 -10.1 -13.7 90th percentile -6.1 -23.9 -10.5 -8.4 0.6 n/a -5.7 n/a -7.4 -5.7 0.4 -7.2 -10.6 -25.7 -6.6 -5.1 -21.7 -7.6 -7.1 6.7 n/a -5.7 n/a -7.6 -7.5 1.8 -40.6 n/a n/a n/a -19.9 n/a n/a -47.7 -20.2 -23.4 n/a n/a n/a -10.6 -17.5 n/a n/a n/a n/a Inter-decile range 49.5 55.7 31.3 49.4 59.5 n/a 66.7 n/a 47.2 39.6 31.4 82.3 59.0 109.5 72.5 45.0 43.5 32.9 49.6 40.9 n/a 66.7 n/a 44.8 28.4 29.4 102.8 n/a n/a n/a 38.0 n/a n/a 52.2 25.9 31.0 n/a n/a n/a 31.2 34.8 n/a n/a n/a n/a

Range of returns 135.8 62.7 34.8 55.6 69.9 61.4 69.9 87.4 50.6 88.0 59.0 86.6 62.3 135.8 80.1 161.9 50.5 44.8 55.6 69.9 61.4 69.9 87.4 51.3 88.0 50.4 138.0 51.6 88.6 80.1 98.7 n/a 54.2 59.2 26.5 33.0 35.3 n/a 66.1 35.0 40.6 39.7 58.4 35.9 44.5

* Total figures are inclusive of the period from 1996 to 2011 28 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Range of returns (IRR and multiple) since inception – investment stage (1996 onwards) and vintage year Continued

Range of returns – multiple (%) by investment stage and vintage year Since inception to December 2015 Distributions (DPI)

Small/Mid-MBO Mid/Large MBO Venture

Total* 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 201020092008 2011 Total* 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 201020092008 2011 Total* 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 201020092008 2011 % p.a. % p.a. % p.a. 800  200

180 700  160 600  140 500 120  400 100

 80 Pooled average 300 10th percentile 60 200  25th percentile 40 Median 100  75th percentile 20

90th percentile 0  0

No. of funds 199 11 12 13 13 6 10 7 14 21 22 13 11 12 11 197 12 15 12 16 7 10 9 18 19 23 13 8 5 8 117 1 9 11 12 12 6 2 7 11 12 6 8 5 5

Pooled average 117.9 138.9 145.7 169.7 199.3 224.0 179.1 157.6 111.6 69.3 104.4 93.4 57.4 74.8 93.8 126.1 179.6 171.2 216.3 198.7 195.7 171.4 181.7 129.9 84.4 106.3 75.4 72.2 75.9 83.1 69.3 n/a 81.3 40.1 71.2 72.1 116.1 n/a 93.6 52.6 62.5 12.1 42.6 8.9 75.0

10th percentile 287.8 410.1 195.4 299.4 486.9 n/a 260.4 n/a 277.4 240.9 459.2 576.6 311.4 789.5 236.9 279.4 241.9 242.0 322.1 373.4 n/a 260.4 n/a 230.6 224.1 435.2 286.1 n/a n/a n/a 136.2 n/a n/a 104.4 96.8 123.1 n/a n/a n/a 98.3 113.8 n/a n/a n/a n/a

25th percentile 179.8 175.9 183.1 179.4 327.4 290.0 231.4 311.7 178.0 118.5 165.5 157.0 106.9 134.7 154.0 193.6 206.9 191.0 224.1 281.5 269.2 221.9 296.5 178.0 129.5 159.6 110.2 102.0 647.3 200.4 80.8 n/a 124.3 65.9 77.5 93.6 108.8 n/a 152.7 41.4 74.1 65.4 114.2 11.6 71.2

Median 109.8 94.6 151.2 139.2 196.5 190.0 161.8 246.9 100.7 67.4 95.7 85.7 57.2 34.3 49.1 135.6 150.0 167.4 157.4 185.9 183.8 161.8 246.9 132.0 72.6 115.2 66.0 71.8 115.0 49.2 30.8 n/a 45.2 30.8 40.3 27.0 68.6 n/a 28.0 23.5 35.2 8.7 25.2 10.0 0.0

75th percentile 55.0 70.9 90.0 64.4 176.0 95.6 106.0 135.6 40.0 40.7 40.9 35.9 6.7 20.9 2.7 73.9 94.5 90.2 95.9 175.7 127.4 127.8 149.8 54.6 41.2 74.2 15.9 45.1 27.8 5.0 10.2 n/a 8.3 17.1 21.6 9.1 9.3 n/a 11.3 1.6 10.9 0.0 0.0 3.3 0.0

90th percentile 12.1 18.5 51.4 24.6 90.1 n/a 76.7 n/a 0.0 23.1 9.1 3.1 0.4 0.0 0.1 25.3 34.1 58.2 62.0 109.7 n/a 76.8 n/a 0.0 21.7 9.4 3.1 n/a n/a n/a 0.0 n/a n/a 10.8 6.4 0.8 n/a n/a n/a 0.0 0.0 n/a n/a n/a n/a

Inter-decile range 275.7 391.6 144.0 274.8 396.8 n/a 183.7 n/a 277.4 217.7 450.1 573.5 310.9 789.5 236.8 254.1 207.8 183.8 260.1 263.6 n/a 183.6 n/a 230.6 202.4 425.7 283.0 n/a n/a n/a 136.2 n/a n/a 93.6 90.4 122.3 n/a n/a n/a 98.3 113.8 n/a n/a n/a n/a

Range of returns 1002.8 441.1 152.7 343.4 488.6 352.1 187.2 359.9 335.9 229.5 560.1 720.9 350.8 1002.8 242.2 1002.8 232.5 237.6 282.0 324.3 352.1 187.2 262.0 335.9 243.9 560.1 354.9 348.6 975.2 241.7 222.2 n/a 151.8 98.8 101.0 123.8 152.7 n/a 199.9 102.3 119.5 186.5 222.2 11.4 130.6

* Total figures are inclusive of the period from 1996 to 2011 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015 29

Range of returns – multiple (%) by investment stage and vintage year Since inception to December 2015 Total Value (TVPI)

Small/Mid-MBO Mid/Large MBO Venture

Total* 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 201020092008 2011 Total* 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 201020092008 2011 Total* 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 201020092008 2011 % p.a. % p.a. % p.a. 1400 1000 300

1200 250 800 1000 200 600 800 150 600 400 Pooled average 100 10th percentile 400 25th percentile 200 Median 200 50 75th percentile

90th percentile 0 0 0

No. of funds 199 11 12 13 13 6 10 7 14 21 22 13 11 12 11 197 12 15 12 16 7 10 9 18 19 23 13 8 5 8 117 1 9 11 12 12 6 2 7 11 12 6 8 5 5

Pooled average 159.3 139.8 158.7 175.3 213.7 226.2 188.6 162.8 142.7 126.7 151.1 143.2 133.6 186.8 181.9 162.0 180.1 175.8 218.4 204.7 198.1 181.1 197.9 164.7 125.4 151.6 139.5 137.2 187.9 176.9 123.7 n/a 92.6 68.4 107.3 92.6 128.5 n/a 160.0 165.3 150.1 131.3 154.3 113.2 148.4

10th percentile 291.1 410.1 243.4 299.4 487.1 n/a 260.4 n/a 304.3 242.5 459.2 593.4 343.3 1256.4 393.8 281.5 241.9 270.8 322.3 373.5 n/a 260.4 n/a 236.6 232.5 435.2 311.2 n/a n/a n/a 177.4 n/a n/a 141.4 153.9 133.4 n/a n/a n/a 284.7 226.7 n/a n/a n/a n/a

25th percentile 197.3 175.9 189.8 190.1 327.7 290.0 231.4 311.8 178.1 163.5 192.3 175.6 178.0 265.8 230.3 206.7 207.6 197.3 226.5 282.7 269.2 229.1 296.5 199.4 179.0 188.3 160.8 169.6 980.8 239.2 140.9 n/a 134.2 111.8 92.2 110.3 125.3 n/a 250.1 166.1 173.9 282.6 204.2 141.0 167.6

Median 147.1 94.6 151.2 139.2 204.9 202.2 161.8 230.5 120.5 128.3 155.7 167.3 133.1 147.0 136.5 154.6 150.6 167.4 163.3 195.1 186.3 164.4 230.5 155.1 135.5 154.6 144.2 136.7 154.1 141.9 89.0 n/a 59.8 53.1 65.2 59.8 86.4 n/a 54.9 100.9 134.5 108.8 122.9 118.5 98.1

75th percentile 99.3 73.0 90.0 75.4 182.8 95.7 140.4 136.1 81.8 97.8 116.2 129.1 107.6 109.8 99.7 120.8 94.5 90.2 95.9 180.1 127.6 140.4 177.8 90.0 96.3 127.5 121.6 123.9 141.8 91.9 49.0 n/a 39.0 25.6 42.1 32.0 55.0 n/a 28.0 71.1 93.0 56.0 65.6 77.7 57.1

90th percentile 69.3 18.7 54.3 25.3 113.7 n/a 85.6 n/a 53.0 70.8 69.6 71.2 70.9 34.5 78.8 79.7 34.5 64.0 69.9 134.1 n/a 85.6 n/a 53.9 63.7 108.5 30.7 n/a n/a n/a 25.0 n/a n/a 18.1 9.9 17.1 n/a n/a n/a 54.3 33.1 n/a n/a n/a n/a

Inter-decile range 221.8 391.5 189.1 274.1 373.4 n/a 174.9 n/a 251.3 171.7 389.6 522.2 272.4 1221.9 315.0 201.8 207.4 206.7 252.4 239.4 n/a 174.9 n/a 182.7 168.8 326.8 280.5 n/a n/a n/a 152.5 n/a n/a 123.3 144.0 116.2 n/a n/a n/a 230.4 193.7 n/a n/a n/a n/a

Range of returns 1669.8 440.9 218.6 343.4 480.0 352.1 180.7 328.8 337.8 187.7 560.1 665.6 291.8 1660.0 353.3 1669.8 232.3 237.6 280.1 316.2 352.1 180.7 262.1 337.8 187.7 560.1 386.0 291.8 1530.7 353.3 610.1 n/a 129.2 124.4 154.1 120.3 146.8 n/a 244.1 253.6 229.3 610.1 203.9 87.8 141.1

* Total figures are inclusive of the period from 1996 to 2011 30 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Capital raised and realised

Capital raised and realised by investment stage and subcategories to year end December 2015

Distributions Residual value Total value No. of funds Capital raised (£mn) Paid-in capital (£mn) (£mn) % (£mn) % (£mn) % Pre-1996 vintage funds Early stage 24 344 343 569 1.66 15 0.04 584 1.70 Development 35 529 528 903 1.71 2 0.00 905 1.71 Mid MBO 33 1,194 1,174 2,083 1.77 0 0.00 2,083 1.77 Large MBO 26 3,717 3,605 6,934 1.92 1 0.00 6,935 1.92 Generalist 35 1,448 1,439 3,484 2.42 15 0.01 3,499 2.43 Subtotal pre-1996 153 7,232 7,090 13,973 1.97 33 0.00 14,006 1.98 1996 vintage funds onwards Venture 132 9,489 8,222 5,445 0.66 4,710 0.57 10,156 1.24 pre-2002 vintage funds 43 3,398 3,322 2,527 0.76 755 0.23 3,282 0.99 2002 vintage funds onwards 89 6,091 4,899 2,919 0.60 3,955 0.81 6,874 1.40 Small MBO 71 6,534 4,030 3,626 0.90 2,834 0.70 6,460 1.60 Mid MBO 177 58,665 44,739 51,294 1.15 19,857 0.44 71,151 1.59 Large MBO 53 140,548 119,960 145,060 1.21 46,548 0.39 191,609 1.60 Subtotal 1996 onwards 433 215,237 176,950 205,426 1.16 73,950 0.42 279,376 1.58 Grand total all funds 586 222,469 184,040 219,399 1.19 73,983 0.40 293,382 1.59 Subcategories (all vintages) UK 407 40,855 33,999 42,355 1.25 10,568 0.31 52,923 1.56 Non-UK 179 181,614 150,041 177,044 1.18 63,415 0.42 240,459 1.60 Pan-European 171 179,081 148,665 177,832 1.20 61,406 0.41 239,238 1.61 Technology 143 9,068 7,575 5,221 0.69 4,595 0.61 9,816 1.30 Non-Technology 443 213,401 176,465 214,178 1.21 69,389 0.39 283,566 1.61

Please note that total figures do not necessarily equal the sum of the components due to rounding. BVCA Private Equity and Venture Capital Performance Measurement Survey 2015 31

Capital raised and realised by vintage year to year end December 2015

Distributions Residual value Total value Number of Funds Capital raised (£mn) Paid-in capital (£mn) (£mn) % (£mn) % (£mn) % 1980-84 13 165 165 338 2.06 0 0.00 338 2.06 1985 13 441 441 818 1.86 0 0.00 818 1.86 1986 7 126 126 222 1.77 0 0.00 222 1.77 1987 13 502 502 782 1.56 0 0.00 782 1.56 1988 19 622 619 1,147 1.85 18 0.03 1,165 1.88 1989 16 785 785 1,580 2.01 11 0.01 1,590 2.03 1990 13 1,301 1,301 2,040 1.57 0 0.00 2,040 1.57 1991 14 342 342 636 1.86 0 0.00 636 1.86 1992 7 211 211 407 1.93 0 0.00 407 1.93 1993 10 368 365 710 1.94 1 0.00 711 1.95 1994 19 1,502 1,376 3,647 2.65 3 0.00 3,649 2.65 1995 9 868 858 1,647 1.92 1 0.00 1,648 1.92 1996 13 1,473 1,413 2,686 1.90 1 0.00 2,687 1.90 1997 24 4,348 4,085 6,856 1.68 13 0.00 6,869 1.68 1998 16 5,608 5,158 9,140 1.77 26 0.01 9,166 1.78 1999 25 7,690 7,408 12,356 1.67 361 0.05 12,716 1.72 2000 26 8,116 8,008 14,985 1.87 505 0.06 15,490 1.93 2001 30 15,626 15,112 29,095 1.93 1,170 0.08 30,264 2.00 2002 19 3,343 2,951 5,049 1.71 178 0.06 5,227 1.77 2003 18 7,392 7,019 11,767 1.68 702 0.10 12,469 1.78 2004 12 3,695 3,025 5,411 1.79 505 0.17 5,916 1.96 2005 27 26,262 24,991 32,099 1.28 8,779 0.35 40,878 1.64 2006 38 29,023 24,067 20,023 0.83 10,642 0.44 30,664 1.27 2007 39 27,535 26,236 27,265 1.04 12,452 0.47 39,717 1.51 2008 24 23,313 21,564 16,320 0.76 13,844 0.64 30,164 1.40 2009 20 7,751 6,990 4,809 0.69 4,851 0.69 9,660 1.38 2010 17 3,806 2,365 1,663 0.70 2,637 1.12 4,300 1.82 2011 17 9,966 5,681 4,319 0.76 5,550 0.98 9,869 1.74 2012 14 4,736 3,982 1,345 0.34 4,163 1.05 5,509 1.38 2013 18 15,771 5,612 194 0.03 6,513 1.16 6,707 1.20 2014 18 2,371 568 38 0.07 542 0.95 580 1.02 2015 18 7,411 715 8 0.01 515 0.72 523 0.73 Total 586 222,469 184,040 219,399 1.19 73,983 0.40 293,382 1.59 32 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Capital raised and realised

Continued

Across all vintage years and investment stages Across all vintage years, BVCA funds have raised from when BVCA records commenced in 1980 £222 billion for investment. Of the capital raised, to the present day (of December 2015), BVCA £184 billion has been drawn down to date. member funds have raised £222bn for investment. This indicates an amount of around £38 billion The fundraising environment improved in 2015 that is available for the industry to invest. Of the relative to 2014, which looks to have overcome capital paid in, £219 billion has been returned to concerns centred on economic weakness both investors and £74 billion is retained in the portfolio. domestically and across Europe2. The total value (distribution plus residual value) as a percentage of paid-in capital is 159%. The tables overleaf on capital raised and realised show the ratio of distributions made to paid-in capital, the residual value of the funds to paid-in capital and the total value created to paid-in capital. In most cases, capital is paid into funds over a number of years as suitable investment opportunities arise.

2. Please note that the capital raised figures reported in this report are not comparable with the capital raised figures in the BVCA Investment Activity Report for the same period. Firstly, this report examines only the UK-based unlisted funds that raise capital from the third party investors, whereas the Investment Activity Report covers not only these funds but also VCTs and listed private equity vehicles. Secondly, this report only includes the funds, which have made their first capital call from their investors. Furthermore, it is the total amount raised by these funds that is reported, not just the amount raised in a particular year (2015 in this case). The Investment Activity Report, on the other hand, considers only the amount raised in the relevant year irrespective of the timing of the first capital call. For example, consider Fund A, which started fundraising in 2009, raised £200 million in 2009, and £100 million in 2010, and made a capital call in July 2010. The Investment Activity Report 2010 would have included only the £100 million raised in 2010 (the £200 million raised in 2009 should have been covered by the 2009 report). The Performance Measurement Report 2010 would have included this fund for the first time in its 2010 vintage sub category and reported the total amount raised, i.e. the £300 million (the fund would not have been reported in Performance Measurement Report 2009). BVCA Private Equity and Venture Capital Performance Measurement Survey 2015 33

Appendix I – Methodology

The Survey – Introduction Methodology also to review the overall performance of technology Eligibility criteria The BVCA, in conjunction with Capital Dynamics The Survey utilises the BVCA’s proprietary funds. As previously stated, we also show the The survey shows the aggregate returns produced and PwC, carried out the BVCA Performance online data collection portal, Benchmark, performance of listed private equity investment between 1980 and 2015 by independent, UK-based Measurement Survey for the year ended 31 to collect data on the performance of BVCA companies as an entirely separate category. private equity funds managed by UK private equity December 2015. The survey highlights the member, UK-managed funds that raise capital firms that are members of the BVCA. Non-UK and To reflect changes in the marketplace, funds set performance of ‘independent’ UK private equity from institutional investors (the ‘independents’). technology-focused funds are included. Venture up from 1996 onwards have been reclassified into funds – funds raised from external investors for capital trusts and funds not open to external four investment stage categories: Venture, Small investment into businesses at the venture capital The vast majority of BVCA member firms that investors have been excluded from the survey. MBO (including development capital), Mid MBO (early stage and development) and private equity manage funds eligible for this report responded While listed private equity is excluded from the and Large MBO. Pre-1996 vintage funds remain (MBO) stages (and managed from the manager’s to the survey. This year’s survey incorporates the main analysis, they are shown as an entirely in the previous stage categories, that is, Early Stage, UK office), but excluding investments made results of 586 private equity and venture capital separate category for comparison purposes. Development, Mid MBO, Large MBO and Generalist. from the fund manager’s own balance sheet. funds – the most comprehensive dataset to date. This is reflected in the tables accordingly. Please It also excludes listed private equity investment We therefore believe that it is the most complete The BVCA represents the vast majority of note that when comparing the totals and subtotals companies (formerly known as private equity country-specific survey on the performance of private equity and venture capital in the UK. with underlying category inputs, in some instances investment trusts (PEITs)) and venture capital private equity funds in the world. Full members, such as those included in this there may be minor discrepancies due to rounding. trusts (VCTs), although listed private equity survey, are UK-based firms, which manage Capital Dynamics were responsible for verifying private equity and venture capital funds from is shown as a separate category. UK private equity returns are compared in the the data with the private equity funds and, where the UK. Funds managed by former members report with the FTSE 100 and FTSE All-Share This is the twenty-second annual set of performance appropriate, correcting the data upon verification. of the BVCA have been included where indices, data supplied by State Street Global results that the BVCA has published. information has been available, but these are Services on UK pension funds and various other The BVCA managed and assisted with the project, few and most are no longer active in the private indices. Due care should be taken in comparing from the gathering of data through to writing and equity industry. Firms that have never been the statistics provided by State Street Global editing the summary pamphlet and this final report. members of the BVCA are not included. Services on UK pension funds with private equity The results of the survey have been analysed, results. The return quoted for private equity funds by both investment stage and vintage year. is the internal rate of return (IRR) to investors, net Further analysis has been included to consider of costs and fees. Returns for State Street Global the performance of UK and non-UK funds, and Services Pension Fund Universes and indices, however, are gross time-weighted returns. 34 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Appendix I – Methodology

Continued

Calculation of return and the CFA (Chartered Financial Analyst) the limitations of the PME method, particularly Investisseurs en Capital (AFIC), the French The returns are derived from cash flows and Institute (formerly known as AIMR – Association around the possibility that the hypothetical PME national association, and which were first valuations of funds at the relevant period for Investment Management and Research) vehicle could end up in a ‘short position’ or hold introduced in March 2005. year-ends and the calculation of the change supports the use of the IRR as the most a negative NAV, a modified metric of PME+ has 4 However, as noted in the ‘Disclaimer’ at the between them on a per annum (p.a.) basis. appropriate measure of private equity and been proposed by Rouvinez (2003) . venture capital fund performance. end of this report, PwC has not independently The measurement of performance in this survey The performance numbers and percentiles checked the valuation data, nor confirmed that is the internal rate of return (IRR), a widely used The IRR is regarded to be the most analyses published throughout this report have the International Private Equity and Venture measure of performance and comparable with comprehensive absolute measure of private been computed using SPSS Statistics, a specialist Capital Valuation Guidelines have been strictly similar studies of private equity fund returns in equity’s performance. Making direct statistical software package. The use of SPSS adhered to. Sixty-two per cent of the funds the US and Europe, which are both time- and comparisons with other asset classes, however, ensures a greater level of robustness and surveyed contain unrealised investments, money- weighted. The return represents the is a key concern for institutional investors. richness in the final analysis not found in which are usually stated at fair value in accordance ‘net’ return to investors after costs and fees. Given the inherent nature of IRRs, one of the common spreadsheet software applications. with these Guidelines, and which give a return in Provision is made for performance fees that limitations or difficulties of its use arises when an interim measure of performance. Listed Private Equity would have been payable if the valuation had comparing IRRs to the time-based measures of Confidentiality been realised at the balance-sheet date. Returns total return generated from investing in Morningstar (www.morningstar.com) has for State Street Global Services Pension Fund traditional publicly quoted financial instruments calculated the performance of listed private The data for this survey was provided by BVCA Universes and indices, supplied by State Street, like individual equities or fixed income or equity (formerly known in the survey as quoted members on the basis that no data relating to are gross time-weighted returns (TWR). indeed the indices of such instruments. private equity investment trusts or PEITs). any individual member or fund would be seen More information on listed private equity can by any other member, including those on the The IRR is used as the appropriate performance One of the key ways to overcome this difficulty be found at: www.lpeq.com/ BVCA Investor Relations Committee, or by measure for venture capital and private equity, has been through the advent of performance another person or organisation other than PwC due to the high level of discretion of the metrics comparing public markets with IRRs in Valuations or Capital Dynamics (unless members specified manager in determining cash flows, to and from a meaningful manner. The Public Market The survey is based on cash flows and valuations otherwise) other than in the anonymous and the fund-investor, and the difficulty in determining Equivalent (PME) method – first devised by supplied by each participating fund. PwC has aggregate form in which it is published. portfolio valuations at the date of these cash flows. Long and Nickels (1996)3 – enables investors to stipulated that these be based on the International Time-weighted return calculations require directly compare IRRs with the performance that Private Equity and Venture Capital Valuation frequent and easily obtainable re-valuations and would been generated from publicly quoted (IPEV) Guidelines, developed by the BVCA, assume a low level of manager discretion in the securities over the same time period of the cash European Private Equity and Venture Capital timing of cash flows. The academic community flows. Moreover, in order to overcome some of Association (EVCA) and Association Française des

3. Long, A, and Nickels, C (1996), ‘A private investment benchmark’, mimeo; paper presented to AIMR Conference on Venture Capital Investing, February. 4. Rouvinez, C (2003), ‘Private equity benchmarking with PME+’, Venture Capital Journal, August, pages 34-38. BVCA Private Equity and Venture Capital Performance Measurement Survey 2015 35

Appendix II – Glossary of terms

Capital raised (or ‘funds raised’) ‘Mid MBO’ Subcategories – all vintages Net and gross returns Capital committed by investors (capital they Invests in management buyouts and buy-ins with All private equity returns quoted are the net ‘Technology’ have agreed to subscribe). This will not usually £10 million to £100 million of equity invested. returns of investors, after all costs and fees. all be paid in at one time. Invests primarily (at least 60% of the fund) in The performance of State Street Global Services ‘Large MBO’ technology companies. All Funds Universe and indices, shown as Inception/since inception Invests in management buyouts and buy-ins ‘Principal Comparators’, however, are gross The period from a fund’s first drawdown up to with more than £100 million of equity invested. ‘Non-UK’ time-weighted returns. a particular point in time, that is, 31 December Invests primarily (at least 60% of the fund) in 2015 in this report. Funds measured thus are at 1996 vintage funds onwards companies outside the UK. Not applicable least four years old. Due to the small number of private equity funds ‘Venture’ ‘Pan-European’ in some periods and the need for confidentiality, Investment stage and general fund Invests in companies in the seed (concept), Invests in more than two European countries. some ranges are marked not applicable – that is, n/a. investment profile start-up (within three years of a company’s establishment) and early stages of development. IRR – see Return Paid-in capital Pre-1996 vintage funds Capital that has actually been paid into the fund ‘Small MBO’ Multiple by investors. ‘Early Stage’ Invests in small management buyouts and The distributed (DPI) multiple is the total Invests in companies in the seed (concept), buy-ins (MBOs) with less than £10 million of amount distributed to investors as a percentage Percentile ranking start-up (within three years of a company’s equity invested. This category also includes of paid-in/committed capital. Percentile rankings indicate the position establishment) and early stages of development. development capital for expansion stage occupied by a portfolio return in a particular companies, that is, established companies that The total value multiple (TVPI) is the total universe. A ranking of the nth percentile ‘Development’ raise private equity to make acquisitions, fund amount distributed plus the residual value means that n% of funds achieved a return Invests in expansion stage companies, that is, working capital, buy new plant machinery and attributable to investors as a percentage of greater than or equal to that fund’s return. established companies that raise private equity the like. paid-in capital. See also ‘range of returns’. to make acquisitions, fund working capital, buy new plant, etc. and small management buyouts and buy-ins (MBOs) with less than £10 million of equity invested. 36 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Appendix II – Glossary of terms

Continued

Principal comparators Median Total return State Street Global Services All Funds Universe The principal comparators are the FTSE UK Fiftieth percentile – The return of funds in the The aggregate of all cash flows. The State Street Global Services All Funds Universe Equity and FTSE World and Europe (ex-UK) middle of the ranking. is the largest available universe of UK pension Indices and the UK Equity, Overseas Equity and Universe funds. It is estimated to represent somewhere total assets returns of the State Street Global Lower quartile A group of similar portfolios assembled to in the region of 60% of the UK defined benefit Services Pension Fund Universes. The figures Seventy-fifth percentile – 75% of the funds have provide a benchmark against which the pension market by value. are detailed in Appendix III of this report. an equal or higher return than this value. performance of an individual portfolio may be compared. Any such universe should comprise Weighted average (Principal comparators) Range of returns: quartiles/deciles/percentiles Bottom decile portfolios with similar investments and The aggregate returns of a number of like The ‘range of returns’ represents the results of a Ninetieth percentile – 90% of the funds have an objectives, and the same domicile and tax status. portfolios, the results of which are used for universe of portfolios constructed for the purposes equal or higher return than this value. comparing performance. The weighted of comparing performance. Within each range, Valuations average for a number of portfolios is calculated a portfolio’s results are defined in terms of a Pooled average This refers to the assessed value of the unrealised by weighting each individual portfolio’s return percentile ranking. Ranges can be subdivided The IRR or return for the total sample of funds part of the portfolio, which is assumed to be by the proportion (by the average value of by quartiles, deciles and percentiles. The range being analysed. realised at 31 December 2015 in the final return investment over the period) of the combined between the tenth and ninetieth percentile is calculation. This assessment is carried out in total that it represents. known as the ‘interdecile’ range. Return accordance with the International Private Equity The annualised internal rate of return (IRR) and Venture Capital Valuation Guidelines. Top decile achieved over a period of time, based on the Tenth percentile – 10% of the funds have an portfolio cash flows and valuations. The cash Vintage year equal or higher return than this value. flows used in the calculations are the total Governed by the date of the fund’s first actual fund cash flows and the returns are drawdown, that is, the earlier of either (I) the Upper quartile therefore time-weighted and money-weighted. first payment by the investor to the fund; or (II) Twenty-fifth percentile – 25% of the funds have This type of calculation is often referred to as the first investment made by the fund. an equal or higher return than this value. ‘time line basis’ (see also Methodology, ‘Calculation of Return’). BVCA Private Equity and Venture Capital Performance Measurement Survey 2015 37

Appendix III – Principal comparators and asset class overview

UK private equity returns are compared in this report with the FTSE 100, the FTSE All-Share Index, other indices, and data supplied by State Street Global Services on returns from UK pension funds in aggregate.

Care should be taken in comparing the statistics Principal comparators’ return (% p.a.) on UK pension funds with private equity returns UK pension funds (State Street Global Services All Funds Universe) – they are provided for indicative purposes only. The performance of private equity funds is % p.a. measured by the internal rate of return (IRR)  to investors, net of costs and fees. Returns from the State Street Global Services Pension Fund Universe and from indices, however, are gross 14.2 time-weighted returns (TWR).  13.2

Pension fund performance 10.2 The State Street Global Services All-Funds is the  8.7 8.5 largest available universe of UK pension funds. 7.3 7.5 6.2 It is estimated to represent somewhere in the 6.06.0 5.6 region of 60% of the UK defined benefit pension  market by value. 2.9 1.0

 2015 Three years Five years Ten years

Total Private Equity Total Pension Funds Assets (State Street) FTSE All-Share 38 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Appendix III – Principal comparators and asset class overview

Continued

Current year and longer term returns – IRR (% p.a.) Principal comparators’ return (% p.a.) by investment stage and subcategory UK pension funds (State Street Global Services Performance Services)

No. of funds 2015 Three years Five years Ten years 2015 Three years Five years Ten years Pre-1996 vintage funds* 153 -2.3 -2.6 -2.9 35.2 UK Equities 1.5 8.2 6.7 5.8 1996 vintage funds onwards Overseas Equities 4.2 11.0 7.1 6.5 Venture 132 9.1 16.0 9.2 5.1 UK Bonds -0.2 5.4 7.6 5.9 pre-2002 vintage funds 43 0.4 19.5 4.3 -0.3 Overseas Bonds 1.4 3.8 5.4 6.4 2002 vintage funds onwards 89 10.9 15.5 10.4 7.9 Index-Linked 0.3 6.9 8.5 7.6 Cash 1.9 1.4 1.7 3.0 Small MBO 71 17.6 14.2 10.7 23.5 Alternatives 8.3 10.6 8.3 7.1 Mid MBO 177 21.7 22.3 15.0 16.0 Property 11.6 12.1 8.9 4.4 Large MBO 53 3.5 11.6 8.8 12.9 Total Assets 2.9 8.5 7.5 6.2 Subtotal 1996 onwards 433 8.7 14.2 10.2 13.2 FTSE indices Grand total all funds 586 8.7 14.2 10.2 13.2 FTSE All-Share 1.0 7.3 6.0 5.6 Subcategories (all vintages) FTSE 100 -1.3 5.7 4.9 4.8 UK 407 11.9 16.7 12.6 11.5 FTSE 250 11.2 15.1 11.6 4.5 Non-UK 179 8.3 13.9 9.9 13.5 FTSE SmallCap 9.2 13.5 10.3 6.2 Pan-European 171 8.0 13.9 9.9 13.4 FTSE World (ex-UK) -1.3 8.8 6.9 1.7 Technology 143 13.3 18.8 10.6 5.8 FTSE Europe (ex-UK) 11.1 12.4 8.4 -0.1 Non-Technology 443 8.4 14.0 10.2 13.7 Inflation indices

* The time period returns for the pre-1996 vintage funds are shown only in their summary form and should be interpreted with special care. As the Retail Price Index 1.2 1.8 2.7 3.0 majority of these funds have either been wound up or retain only minimal residual values, a small number of positive exit events or write-offs can Average Earnings 1.5 1.9 1.7 n/a cause large swings in their short term returns. The weight of money in this group now has little impact on the returns of the total sample. Source: State Street Global Services Performance Services, UK Pension Fund Annual Review 2015. N.B. ‘Alternatives’ was formerly known as ‘Other’. BVCA Private Equity and Venture Capital Performance Measurement Survey 2015 39

Appendix IV – Range of returns (IRR) medium to long-term

This appendix shows the range of returns It should also be noted that the ‘Pooled average’ (under the IRR metric) over the longer term – return in the ‘Total’ column in the following three-, five- and ten- year periods. The range of tables is the return for all funds that were in returns ‘since inception’ is the most appropriate existence at the beginning of the measurement measurement for private equity and venture period (e.g. the ‘pooled average’ return for funds capital and these are shown on pages 21-29 over five years is calculated by measuring the of the main report. aggregate performance of all funds that were in existence on 1 January 2010 for the five-year It is important to note that the shorter the time period from 1 January 2010 to 31 December period measured, the more volatile the returns 2015). This differs from the medium to long-term are likely to be. The most probable cause of return tables, which calculate the five-year returns extreme numbers is the realisation of assets at on all funds in the survey at 31 December 2015, prices that differ significantly from previous regardless of their vintage year. The same principle valuations. The more extreme numbers are likely applies to the three- and ten-year returns. to occur where the time period measured is short, or where funds in older vintages realise their last The top and bottom deciles are excluded from remaining assets from a small residual carrying the range to produce a range that excludes value. outliers. This is known as the ‘interdecile’ range.

Put simply, an investment with an original cost Where there are fewer than ten funds in a sample, of £1 might be valued at £0.50. If the investment the 10th and 90th percentile are denoted n/a subsequently failed, the loss of £0.50 of value (not applicable) in the following tables. would record as -100% over whatever time period was measured. If the investment had been sold at cost, say nine months later, the return in the period would be in excess of 150% on an annualised basis. 40 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Appendix IV – Range of returns (IRR) medium to long-term – three years

Range of returns (IRR) by investment stage and subcategory (% p.a.) – three years

Pre-1996 vintage funds 1996 vintage funds onwards Subcategories (all vintages) Total Early Stage Develop- Mid MBO Large MBO Generalist Total Venture Small MBO Mid MBO Large MBO Total UK Non-UK Pan- Technology Non- ment European Technology No. of funds 153 24 35 33 26 35 379 120 56 153 50 532 365 167 155 134 398 Pooled average -2.6 -7.5 6.2 n/a -14.4 -0.3 14.1 16.2 14.8 21.8 11.6 14.1 17.5 13.6 13.7 19.0 13.9 10th percentile 0.0 0.0 0.0 0.0 0.0 0.0 43.1 40.7 24.2 45.6 70.8 31.7 25.6 39.8 41.7 36.9 28.7 25th percentile 0.0 0.0 0.0 0.0 0.0 0.0 16.9 14.2 13.1 17.1 24.2 11.0 6.7 17.4 15.4 11.9 10.4 Median 0.0 0.0 0.0 0.0 0.0 0.0 2.1 0.0 0.2 0.6 10.9 0.0 0.0 2.3 1.1 0.0 0.0 75th percentile 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -1.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 90th percentile 0.0 0.0 0.0 0.0 0.0 0.0 -9.1 -15.8 -9.1 -5.8 -3.9 -3.7 -1.6 -8.4 -7.6 -5.6 -3.4 Inter-decile range 0.0 0.0 0.0 0.0 0.0 0.0 52.2 56.5 33.4 51.3 74.7 35.4 27.1 48.2 49.2 42.5 32.1 Range of returns 16.1 0.0 12.7 0.0 0.0 3.4 377.9 377.9 156.7 282.9 182.3 377.9 348.2 375.3 375.3 377.9 322.4

Range of returns (IRR) by vintage year (% p.a.) – three years

Total 1980- 1985- 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 84 89 No. of funds 532 13 68 13 14 7 10 19 9 13 24 16 25 26 30 19 18 12 27 38 39 24 20 17 17 14 Pooled average 14.1 n/a 2.0 n/a n/a n/a 1.2 -25.6 n/a 11.6 -0.3 63.8 11.4 22.9 39.3 -7.5 8.4 10.6 16.1 9.8 12.0 12.2 16.2 28.0 25.0 24.4 10th percentile 31.7 0.0 0.0 0.0 0.0 n/a 11.4 0.0 n/a 80.7 0.0 85.8 71.4 103.6 87.0 10.0 50.9 93.7 62.0 39.3 30.6 24.3 43.4 94.1 50.8 132.1 25th percentile 11.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.0 39.5 6.7 29.1 28.6 2.9 17.2 30.9 22.6 15.2 16.9 15.9 21.2 19.7 26.3 52.9 Median 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 3.3 0.0 6.7 17.6 3.6 5.3 6.4 9.3 4.3 13.8 14.1 19.0 75th percentile 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -3.2 -0.1 -9.2 -0.3 0.4 -2.9 -0.4 0.0 2.8 -2.9 -2.0 -1.6 -5.2 90th percentile -3.7 0.0 0.0 0.0 0.0 n/a 0.0 0.0 n/a -19.0 -14.3 -5.4 0.0 -26.6 -5.6 -31.6 -21.6 -2.1 -9.6 -5.4 -5.2 -21.1 -13.7 -11.4 -14.9 -38.8 Inter-decile range 35.4 0.0 0.0 0.0 0.0 n/a 11.4 0.0 n/a 99.7 14.3 91.1 71.4 130.2 92.6 41.6 72.5 95.8 71.6 44.7 35.8 45.4 57.2 105.5 65.7 170.9 Range of returns 377.9 0.0 0.0 0.0 0.0 0.0 12.7 3.4 0.0 118.2 130.5 120.2 174.9 270.6 306.4 221.9 99.6 97.5 137.1 80.0 167.7 111.9 254.5 266.3 156.7 197.3 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015 41

Appendix IV – Range of returns (IRR) medium to long-term – five years

Range of returns (IRR) by investment stage and subcategory (% p.a.) – five years

Pre-1996 vintage funds 1996 vintage funds onwards Subcategories (all vintages) Total Early Stage Develop- Mid MBO Large MBO Generalist Total Venture Small MBO Mid MBO Large MBO Total UK Non-UK Pan- Technology Non- ment European Technology No. of funds 153 24 35 33 26 35 348 112 47 141 48 501 349 152 148 126 375 Pooled average -2.9 -4.9 -12.5 5.1 -8.9 0.1 9.4 9.0 7.4 12.3 8.7 9.4 12.7 8.9 9.0 9.8 9.3 10th percentile 0.0 0.0 0.0 0.0 0.0 0.0 30.5 20.0 41.1 36.2 23.4 21.6 22.0 18.3 20.1 16.6 25.7 25th percentile 0.0 0.0 0.0 0.0 0.0 0.0 12.7 9.1 15.2 14.8 11.5 7.9 6.9 11.0 10.9 6.1 9.8 Median 0.0 0.0 0.0 0.0 0.0 0.0 2.2 0.1 0.0 4.3 4.1 0.0 0.0 1.2 0.6 0.0 0.0 75th percentile 0.0 0.0 0.0 0.0 0.0 0.0 -0.3 -5.7 -0.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 90th percentile 0.0 0.0 0.0 0.0 0.0 0.0 -10.3 -16.3 -8.9 -6.7 -10.6 -7.5 -5.7 -10.4 -10.3 -10.3 -6.4 Inter-decile range 0.0 0.0 0.0 0.0 0.0 0.0 40.7 36.3 50.0 42.9 33.9 29.1 27.6 28.8 30.4 26.9 32.0 Range of returns 156.5 25.4 23.6 131.2 0.0 4.4 288.4 288.4 244.2 239.3 132.4 288.4 288.4 237.9 245.5 140.6 285.6

Range of returns (IRR) by vintage year (% p.a.) –five years

Total 1980- 1985- 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 84 89 No. of funds 501 13 68 13 14 7 10 19 9 13 24 16 25 26 30 19 18 12 27 38 39 24 20 17 Pooled average 9.4 n/a 0.4 n/a n/a n/a -0.5 -14.4 -4.4 -28.7 -4.7 19.4 17.1 18.2 -1.4 -6.4 4.5 6.5 12.7 8.1 8.3 10.5 11.3 18.5 10th percentile 21.6 0.0 0.0 0.0 0.0 n/a 21.3 4.4 n/a 17.2 8.0 42.1 27.1 69.4 50.8 11.6 48.3 140.3 26.0 30.3 53.4 30.5 34.9 55.8 25th percentile 7.9 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 8.9 4.5 8.6 8.2 5.0 20.1 36.7 12.9 14.8 17.5 13.2 14.8 19.8 Median 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -0.4 2.7 11.2 4.8 6.4 10.9 9.2 4.8 8.9 75th percentile 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -3.3 0.0 0.0 -6.7 -9.4 -10.3 -2.9 0.2 0.0 0.6 4.2 3.3 -7.8 -2.3 90th percentile -7.5 0.0 0.0 0.0 0.0 n/a -22.9 0.0 n/a -33.9 -51.6 -20.2 -3.8 -39.3 -15.6 -16.7 -10.5 -6.0 -4.4 -7.7 0.0 -2.9 -10.4 -16.3 Inter-decile range 29.1 0.0 0.0 0.0 0.0 n/a 44.1 4.4 n/a 51.1 59.6 62.3 30.9 108.6 66.4 28.3 58.7 146.3 30.4 38.0 53.4 33.3 45.3 72.1 Range of returns 288.4 0.0 27.7 0.0 0.0 0.0 49.0 131.1 0.0 70.6 111.0 70.7 222.1 279.8 156.4 67.9 83.7 189.4 47.3 68.4 112.7 153.1 86.5 117.1 42 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Appendix IV – Range of returns (IRR) medium to long-term – ten years

Range of returns – IRR (% p.a.) by investment stage and subcategory – ten years

Pre-1996 vintage funds 1996 vintage funds onwards Subcategories (all vintages) Total Early Stage Develop- Mid MBO Large MBO Generalist Total Venture Small MBO Mid MBO Large MBO Total UK Non-UK Pan- Technology Non- ment European Technology No. of funds 153 24 35 33 26 35 379 120 56 153 50 532 365 167 155 134 398 Pooled average -2.6 -7.5 6.2 n/a -14.4 -0.3 14.1 16.2 14.8 21.8 11.6 14.1 17.5 13.6 13.7 19.0 13.9 10th percentile 0.0 0.0 0.0 0.0 0.0 0.0 43.1 40.7 24.2 45.6 70.8 31.7 25.6 39.8 41.7 36.9 28.7 25th percentile 0.0 0.0 0.0 0.0 0.0 0.0 16.9 14.2 13.1 17.1 24.2 11.0 6.7 17.4 15.4 11.9 10.4 Median 0.0 0.0 0.0 0.0 0.0 0.0 2.1 0.0 0.2 0.6 10.9 0.0 0.0 2.3 1.1 0.0 0.0 75th percentile 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -1.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 90th percentile 0.0 0.0 0.0 0.0 0.0 0.0 -9.1 -15.8 -9.1 -5.8 -3.9 -3.7 -1.6 -8.4 -7.6 -5.6 -3.4 Inter-decile range 0.0 0.0 0.0 0.0 0.0 0.0 52.2 56.5 33.4 51.3 74.7 35.4 27.1 48.2 49.2 42.5 32.1 Range of returns 16.1 0.0 12.7 0.0 0.0 3.4 377.9 377.9 156.7 282.9 182.3 377.9 348.2 375.3 375.3 377.9 322.4

Range of returns (IRR) by vintage year (% p.a.) – ten years

Total 1980- 1985- 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 84 89 No. of funds 363 13 68 13 14 7 10 19 9 13 24 16 25 26 30 19 18 12 27 Pooled average 19.2 n/a 3.0 81.6 n/a n/a 42.5 -12.1 97.5 84.6 23.0 57.0 33.6 32.1 28.9 20.2 20.6 23.3 10.7 10th percentile 54.0 0.0 0.0 73.3 0.0 0.0 113.8 53.5 n/a 184.1 139.8 184.0 81.7 85.8 101.2 51.4 72.7 142.9 24.5 25th percentile 15.9 0.0 0.0 0.0 0.0 0.0 17.0 0.0 9.4 101.3 44.9 65.4 37.9 31.4 36.8 20.4 27.6 42.6 18.8 Median 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -4.1 2.5 4.6 24.6 7.7 0.9 12.2 -0.8 10.1 15.2 5.7 75th percentile 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -8.4 -18.3 0.0 -7.4 -10.1 -3.8 -10.7 -3.3 -11.6 1.9 -2.0 -3.7 90th percentile -12.7 0.0 0.0 -21.2 0.0 n/a -10.2 -42.9 n/a -36.9 -60.8 -19.2 -26.5 -22.7 -12.2 -19.6 -12.5 -16.3 -15.1 Inter-decile range 66.7 0.0 0.0 94.5 0.0 n/a 124.0 96.4 n/a 221.0 200.6 203.2 108.2 108.5 113.4 71.0 85.2 159.2 39.6 Range of returns 315.3 0.0 213.1 150.7 0.0 0.0 131.1 212.9 139.6 250.0 314.4 240.7 157.9 136.1 147.5 83.5 192.8 175.9 99.7 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015 43

Appendix V – Since-inception range of returns by vintage year band and investment stage

1991 to 1993 vintage funds

IRR (% p.a.) DPI TVPI Subtotal Early Stage Develop- Mid MBO Large MBO Generalist Subtotal Early Stage Develop- Mid MBO Large MBO Generalist Subtotal Early Stage Develop- Mid MBO Large MBO Generalist ment ment ment No. of funds 31 5 9 7 6 4 31 5 9 7 6 4 31 5 9 7 6 4 Pooled average 19.5 15.3 1.6 21.5 21.7 n/a 191.0 176.2 106.5 186.5 181.0 n/a 191.1 176.2 106.5 186.5 181.0 n/a 10th percentile 31.5 n/a n/a n/a n/a n/a 242.5 n/a n/a n/a n/a n/a 242.5 n/a n/a n/a n/a n/a 25th percentile 22.0 16.9 10.0 35.9 24.7 n/a 198.2 193.1 145.1 226.8 202.3 n/a 198.2 193.1 145.1 226.8 202.3 n/a Median 13.0 12.5 -5.5 26.3 21.5 n/a 151.6 159.9 68.3 198.2 180.9 n/a 151.6 159.9 69.4 198.2 180.9 n/a 75th percentile 2.5 0.2 -8.6 11.0 17.0 n/a 108.4 97.8 59.7 151.6 144.7 n/a 108.4 97.8 59.7 151.6 144.7 n/a 90th percentile -8.6 n/a n/a n/a n/a n/a 58.4 n/a n/a n/a n/a n/a 58.4 n/a n/a n/a n/a n/a Inter-decile range 40.1 n/a n/a n/a n/a n/a 184.1 n/a n/a n/a n/a n/a 184.1 n/a n/a n/a n/a n/a Range of returns 61.3 22.3 33.7 31.8 11.5 n/a 292.5 136.6 102.8 185.8 78.2 n/a 284.0 136.6 102.8 185.8 78.2 n/a

1992 to 1994 vintage funds

IRR (% p.a.) DPI TVPI Subtotal Early Stage Develop- Mid MBO Large MBO Generalist Subtotal Early Stage Develop- Mid MBO Large MBO Generalist Subtotal Early Stage Develop- Mid MBO Large MBO Generalist ment ment ment No. of funds 36 5 8 10 7 6 36 5 8 10 7 6 36 5 8 10 7 6 Pooled average 27.9 15.6 17.5 15.1 39.2 18.4 244.0 172.8 166.8 175.3 295.5 221.0 244.2 172.8 169.5 175.3 295.5 221.5 10th percentile 41.6 n/a n/a 32.6 n/a n/a 256.3 n/a n/a 308.7 n/a n/a 256.3 n/a n/a 308.7 n/a n/a 25th percentile 21.3 17.8 11.7 17.8 51.6 21.8 216.2 195.8 151.0 193.4 264.2 248.0 216.2 195.8 155.3 193.4 264.2 248.0 Median 11.7 13.5 6.9 12.4 27.9 11.6 152.7 159.9 127.7 154.8 222.6 151.2 154.8 159.9 130.3 154.8 222.6 151.8 75th percentile 4.8 0.2 -3.6 8.0 11.7 2.2 119.6 97.8 77.7 130.9 139.6 105.0 120.7 97.8 81.1 130.9 139.6 107.1 90th percentile -3.1 n/a n/a 4.2 n/a n/a 81.6 n/a n/a 119.5 n/a n/a 81.9 n/a n/a 119.5 n/a n/a Inter-decile range 44.8 n/a n/a 28.4 n/a n/a 174.7 n/a n/a 189.2 n/a n/a 174.4 n/a n/a 189.2 n/a n/a Range of returns 63.2 22.3 49.6 29.8 51.6 33.6 426.4 136.6 158.6 201.7 353.7 220.0 417.9 136.6 158.6 201.7 353.7 211.5 44 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Appendix V – Since-inception range of returns by vintage year band and investment stage Continued

1993 to 1995 vintage funds

IRR (% p.a.) DPI TVPI Subtotal Early Stage Develop- Mid MBO Large MBO Generalist Subtotal Early Stage Develop- Mid MBO Large MBO Generalist Subtotal Early Stage Develop- Mid MBO Large MBO Generalist ment ment ment No. of funds 38 4 7 10 9 8 38 4 7 10 9 8 38 4 7 10 9 8 Pooled average 27.9 n/a 20.7 13.7 30.7 36.5 231.0 n/a 172.6 166.9 226.6 331.0 231.1 n/a 175.7 166.9 226.7 331.3 10th percentile 43.2 n/a n/a 32.0 n/a n/a 269.9 n/a n/a 308.7 n/a n/a 269.9 n/a n/a 308.7 n/a n/a 25th percentile 15.6 n/a 11.8 14.8 46.5 19.7 203.4 n/a 153.8 169.5 256.7 256.4 203.4 n/a 159.5 169.5 256.7 256.4 Median 9.5 n/a 4.4 9.6 11.7 11.6 142.3 n/a 116.4 143.0 148.8 151.2 142.3 n/a 121.7 143.0 149.0 151.8 75th percentile 2.0 n/a 1.9 3.0 1.9 -5.7 106.9 n/a 106.0 114.5 106.4 63.5 108.1 n/a 112.9 114.5 106.4 63.5 90th percentile -5.9 n/a n/a -0.2 n/a n/a 67.3 n/a n/a 99.5 n/a n/a 68.4 n/a n/a 99.5 n/a n/a Inter-decile range 49.1 n/a n/a 32.2 n/a n/a 202.5 n/a n/a 209.2 n/a n/a 201.4 n/a n/a 209.2 n/a n/a Range of returns 91.9 n/a 47.7 33.9 66.9 91.9 505.6 n/a 158.6 221.7 399.9 505.6 497.1 n/a 157.5 221.7 399.3 497.1

1994 to 1996 vintage funds

IRR (% p.a.) DPI TVPI Subtotal Early Stage Develop- Mid MBO Large MBO Generalist Subtotal Early Stage Develop- Mid MBO Large MBO Generalist Subtotal Early Stage Develop- Mid MBO Large MBO Generalist ment ment ment Pre-1996 vintage funds No. of funds 28 1 5 9 8 5 28 1 5 9 8 5 28 1 5 9 8 5 Pooled average 31.1 n/a 23.1 16.4 30.7 55.0 236.9 n/a 180.2 174.0 226.6 389.1 237.1 n/a 183.5 174.0 226.7 389.3 10th percentile 51.8 n/a n/a n/a n/a n/a 335.0 n/a n/a n/a n/a n/a 335.0 n/a n/a n/a n/a n/a 25th percentile 16.1 n/a 27.0 15.3 49.1 46.0 219.4 n/a 190.3 178.7 260.4 398.1 219.4 n/a 193.2 178.7 260.4 398.1 Median 11.0 n/a 9.5 10.4 10.7 15.2 146.9 n/a 138.9 134.5 144.2 157.3 147.0 n/a 138.9 134.5 144.3 158.7 75th percentile 2.4 n/a 2.8 1.9 1.9 -3.6 108.6 n/a 109.4 109.6 106.0 93.3 114.5 n/a 117.3 109.6 106.0 93.3 90th percentile -1.5 n/a n/a n/a n/a n/a 95.5 n/a n/a n/a n/a n/a 95.5 n/a n/a n/a n/a n/a Inter-decile range 53.3 n/a n/a n/a n/a n/a 239.5 n/a n/a n/a n/a n/a 239.4 n/a n/a n/a n/a n/a Range of returns 91.9 n/a 40.3 33.9 66.9 91.9 496.9 n/a 120.9 221.7 399.9 496.9 496.9 n/a 113.9 221.7 399.3 496.9 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015 45

IRR (% p.a.) DPI TVPI Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO 1996 vintage funds onwards No. of funds 13 n/a 3 8 2 13 n/a 3 8 2 13 n/a 3 8 2 Pooled average 17.6 n/a n/a 13.1 n/a 190.0 n/a n/a 164.7 n/a 190.2 n/a n/a 164.9 n/a 10th percentile 41.0 n/a n/a n/a n/a 282.9 n/a n/a n/a n/a 282.9 n/a n/a n/a n/a 25th percentile 21.2 n/a n/a 18.0 n/a 200.5 n/a n/a 202.7 n/a 200.5 n/a n/a 202.7 n/a Median 10.0 n/a n/a 10.2 n/a 144.1 n/a n/a 147.2 n/a 144.1 n/a n/a 147.2 n/a 75th percentile -7.2 n/a n/a 5.2 n/a 51.5 n/a n/a 122.7 n/a 54.6 n/a n/a 122.7 n/a 90th percentile -25.5 n/a n/a n/a n/a 20.9 n/a n/a n/a n/a 21.2 n/a n/a n/a n/a Inter-decile range 66.5 n/a n/a n/a n/a 262.0 n/a n/a n/a n/a 261.7 n/a n/a n/a n/a Range of returns 83.2 n/a n/a 62.6 n/a 303.5 n/a n/a 259.5 n/a 303.5 n/a n/a 257.2 n/a

1995 to 1997 vintage funds

IRR (% p.a.) DPI TVPI Subtotal Early Stage Develop- Mid MBO Large MBO Generalist Subtotal Early Stage Develop- Mid MBO Large MBO Generalist Subtotal Early Stage Develop- Mid MBO Large MBO Generalist ment ment ment Pre-1996 vintage funds No. of funds 9 n/a 1 2 3 3 9 n/a 1 2 3 3 9 n/a 1 2 3 3 Pooled average 23.1 n/a n/a n/a n/a n/a 192.0 n/a n/a n/a n/a n/a 192.1 n/a n/a n/a n/a n/a 10th percentile n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 25th percentile 12.4 n/a n/a n/a n/a n/a 203.2 n/a n/a n/a n/a n/a 203.3 n/a n/a n/a n/a n/a Median 1.9 n/a n/a n/a n/a n/a 107.2 n/a n/a n/a n/a n/a 107.2 n/a n/a n/a n/a n/a 75th percentile -6.8 n/a n/a n/a n/a n/a 79.4 n/a n/a n/a n/a n/a 79.7 n/a n/a n/a n/a n/a 90th percentile n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a Inter-decile range n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a Range of returns 91.9 n/a n/a n/a n/a n/a 496.9 n/a n/a n/a n/a n/a 496.9 n/a n/a n/a n/a n/a 46 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Appendix V – Since-inception range of returns by vintage year band and investment stage Continued

IRR (% p.a.) DPI TVPI Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO 1996 vintage funds onwards No. of funds 37 10 5 18 4 37 10 5 18 4 37 10 5 18 4 Pooled average 15.9 21.0 1.4 8.7 n/a 173.5 159.9 106.3 145.5 n/a 173.8 160.5 106.6 145.5 n/a 10th percentile 45.9 43.9 n/a 23.6 n/a 247.3 198.9 n/a 220.2 n/a 247.5 198.9 n/a 220.2 n/a 25th percentile 15.3 18.9 34.2 10.6 n/a 180.5 159.0 189.6 177.9 n/a 180.5 161.4 189.6 178.2 n/a Median 8.1 6.8 -4.8 8.4 n/a 142.8 121.3 55.0 143.4 n/a 142.8 122.8 59.6 143.4 n/a 75th percentile -3.3 -8.6 -24.3 0.5 n/a 76.8 55.9 25.7 102.8 n/a 77.2 63.8 25.7 102.8 n/a 90th percentile -16.1 -15.0 n/a -10.5 n/a 47.5 46.9 n/a 57.6 n/a 48.0 46.9 n/a 57.9 n/a Inter-decile range 62.0 59.0 n/a 34.1 n/a 199.7 152.0 n/a 162.6 n/a 199.6 152.0 n/a 162.3 n/a Range of returns 108.8 59.6 101.1 72.0 n/a 303.5 154.0 287.7 259.5 n/a 303.5 154.0 287.7 257.2 n/a

1996 to 1998 vintage funds

IRR (% p.a.) DPI TVPI Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO No. of funds 53 11 8 26 8 53 11 8 26 8 53 11 8 26 8 Pooled average 14.4 16.1 2.1 8.0 19.6 175.3 145.3 109.6 143.2 204.4 175.7 145.8 109.9 143.5 204.8 10th percentile 39.2 43.8 n/a 20.6 n/a 246.6 197.0 n/a 217.3 n/a 246.6 197.0 n/a 217.3 n/a 25th percentile 16.4 11.1 25.8 10.1 22.7 180.5 151.5 240.3 176.4 246.8 180.5 154.6 240.3 176.4 246.8 Median 7.5 6.1 -3.4 6.0 19.7 142.1 119.3 62.9 129.2 209.6 142.1 119.3 66.3 129.2 210.1 75th percentile -3.3 -7.9 -15.1 -2.0 16.1 76.7 55.6 41.5 94.6 174.8 78.3 55.6 41.5 94.6 174.8 90th percentile -13.5 -14.5 n/a -12.4 n/a 47.4 47.0 n/a 55.3 n/a 47.8 47.0 n/a 56.1 n/a Inter-decile range 52.7 58.3 n/a 33.0 n/a 199.1 150.1 n/a 162.0 n/a 198.8 150.1 n/a 161.2 n/a Range of returns 108.8 59.6 101.1 81.4 71.7 451.1 154.0 451.1 293.6 105.7 451.1 154.0 451.1 293.4 107.2 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015 47

1997 to 1999 vintage funds

IRR (% p.a.) DPI TVPI Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO No. of funds 65 20 6 29 10 65 20 6 29 10 65 20 6 29 10 Pooled average 12.8 8.1 6.2 8.0 16.4 170.3 123.4 129.8 141.3 193.2 172.7 127.6 129.9 146.8 193.6 10th percentile 25.8 39.3 n/a 19.3 73.9 223.5 178.8 n/a 191.0 278.7 238.1 179.1 n/a 197.3 278.9 25th percentile 15.0 7.2 43.5 10.3 24.4 177.9 143.3 331.9 176.9 246.3 178.6 144.5 331.9 176.9 246.6 Median 6.1 -0.1 7.4 3.8 17.1 123.2 89.4 131.7 112.5 208.6 126.9 94.7 131.7 112.9 208.9 75th percentile -3.3 -8.4 -2.9 -2.6 9.7 76.7 45.6 63.0 90.1 162.7 80.3 47.0 64.6 90.1 162.7 90th percentile -9.4 -15.0 n/a -13.4 4.3 42.5 1.7 n/a 58.8 121.9 45.0 37.4 n/a 58.8 121.9 Inter-decile range 35.2 54.4 n/a 32.7 69.5 181.0 177.2 n/a 132.2 156.8 193.1 141.7 n/a 138.5 157.0 Range of returns 126.5 92.0 75.2 49.8 74.5 454.4 200.8 415.1 219.7 162.5 440.9 178.2 415.1 249.7 162.5

1998 to 2000 vintage funds

IRR (% p.a.) DPI TVPI Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO No. of funds 67 21 7 29 10 67 21 7 29 10 67 21 7 29 10 Pooled average 13.6 -4.0 3.5 10.9 16.6 177.3 49.6 115.6 152.3 204.7 181.6 72.8 115.7 160.0 205.2 10th percentile 22.3 4.6 n/a 23.1 30.5 233.0 131.5 n/a 233.0 281.2 235.9 141.5 n/a 233.4 281.3 25th percentile 15.3 3.4 14.8 17.7 22.3 175.2 97.0 175.2 182.7 252.4 175.2 125.3 175.2 187.7 252.6 Median 3.8 -7.9 0.0 9.0 17.4 109.7 36.3 70.9 135.0 197.4 123.2 55.6 73.0 135.0 198.2 75th percentile -4.3 -15.4 -4.3 -2.6 9.7 49.6 16.9 39.3 90.1 162.7 63.3 33.1 39.3 90.1 162.7 90th percentile -14.5 -42.4 n/a -8.8 4.3 15.9 2.1 n/a 61.4 121.9 29.8 22.3 n/a 63.3 121.9 Inter-decile range 36.7 47.0 n/a 31.9 26.2 217.1 129.4 n/a 171.5 159.3 206.1 119.2 n/a 170.0 159.4 Range of returns 101.4 60.8 42.2 75.2 27.3 454.4 151.8 454.4 330.1 162.5 454.4 134.6 454.4 329.9 162.5 48 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Appendix V – Since-inception range of returns by vintage year band and investment stage Continued

1999 to 2001 vintage funds

IRR (% p.a.) DPI TVPI Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO No. of funds 81 32 6 32 11 81 32 6 32 11 81 32 6 32 11 Pooled average 17.8 -1.9 32.5 17.2 20.6 184.9 57.3 244.4 173.9 204.8 191.5 86.0 244.7 186.7 206.2 10th percentile 34.3 4.9 n/a 39.4 35.6 270.5 111.5 n/a 326.7 332.2 271.5 141.4 n/a 327.0 333.3 25th percentile 21.1 2.7 43.0 26.7 31.3 182.4 82.1 334.9 196.4 272.4 189.5 120.4 335.2 205.5 273.0 Median 4.6 -7.6 10.9 15.7 22.9 112.4 38.3 161.1 171.4 189.1 139.2 61.3 161.1 176.7 189.5 75th percentile -7.3 -15.3 -2.0 -0.8 14.9 44.9 18.4 49.1 95.9 173.9 64.5 35.7 49.2 95.9 174.3 90th percentile -15.7 -20.3 n/a -6.3 5.4 17.3 4.2 n/a 63.5 127.8 31.7 20.7 n/a 74.0 127.8 Inter-decile range 50.1 25.2 n/a 45.7 30.2 253.2 107.4 n/a 263.2 204.3 239.8 120.7 n/a 253.0 205.5 Range of returns 117.0 60.8 64.4 75.9 31.7 552.6 151.8 552.6 343.8 225.0 552.6 154.1 552.6 344.3 226.4

2000 to 2002 vintage funds

IRR (% p.a.) DPI TVPI Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO No. of funds 75 35 5 27 8 75 35 5 27 8 75 35 5 27 8 Pooled average 21.4 -2.0 34.2 22.9 25.0 188.4 57.2 249.1 190.0 208.7 195.5 86.5 249.5 201.5 210.5 10th percentile 36.9 6.1 n/a 53.0 n/a 278.6 110.6 n/a 355.1 n/a 279.2 140.7 n/a 355.1 n/a 25th percentile 25.5 0.1 47.6 32.4 34.5 182.7 75.1 407.5 250.4 270.0 189.5 101.5 407.7 250.4 271.1 Median 4.6 -7.7 7.1 23.1 27.3 102.5 30.8 147.1 176.6 186.5 127.6 62.2 147.1 187.6 187.9 75th percentile -7.8 -18.4 -3.9 10.7 20.0 30.4 17.8 32.7 127.4 180.0 57.5 31.1 32.8 127.6 182.0 90th percentile -19.0 -20.3 n/a -4.0 n/a 11.5 5.1 n/a 62.9 n/a 24.2 18.9 n/a 70.8 n/a Inter-decile range 55.9 26.5 n/a 57.1 n/a 267.0 105.5 n/a 292.1 n/a 255.1 121.8 n/a 284.3 n/a Range of returns 117.0 62.7 64.4 71.2 20.9 552.6 123.8 552.6 388.3 184.2 552.6 154.1 552.6 388.9 185.6 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015 49

2001 to 2003 vintage funds

IRR (% p.a.) DPI TVPI Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO No. of funds 67 30 4 25 8 67 30 4 25 8 67 30 4 25 8 Pooled average 23.9 1.3 n/a 24.4 26.8 183.0 83.0 n/a 191.4 190.4 191.2 108.6 n/a 203.9 194.8 10th percentile 41.7 6.2 n/a 61.8 n'a 273.0 120.7 n/a 358.0 n/a 273.1 139.9 n/a 358.0 n/a 25th percentile 27.6 -0.2 n/a 38.1 34.5 189.1 80.3 n/a 259.2 244.3 200.6 98.9 n/a 259.2 246.3 Median 8.2 -5.3 n/a 25.8 27.9 123.8 34.4 n/a 178.1 182.6 142.1 69.3 n/a 189.6 186.3 75th percentile -5.7 -16.0 n/a 11.8 17.6 36.8 17.4 n/a 129.4 164.1 71.1 36.2 n/a 148.0 169.7 90th percentile -16.7 -20.3 n/a -2.8 n/a 11.3 1.6 n/a 69.7 n/a 30.1 14.0 n/a 77.1 n/a Inter-decile range 58.5 26.5 n/a 64.6 n/a 261.7 119.1 n/a 288.3 n/a 243.0 125.9 n/a 281.0 n/a Range of returns 88.1 35.3 n/a 70.4 24.7 552.6 152.7 n/a 388.3 195.6 552.6 154.1 n/a 388.9 185.6

2002 to 2004 vintage funds

IRR (% p.a.) DPI TVPI Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO No. of funds 49 20 3 20 6 49 20 3 20 6 49 20 3 20 6 Pooled average 20.4 1.6 n/a 20.3 24.7 171.0 91.1 n/a 180.0 178.5 181.7 108.8 n/a 186.4 190.1 10th percentile 50.2 8.0 n/a 62.8 n/a 269.2 123.6 n/a 348.1 n/a 277.8 133.6 n/a 348.1 n/a 25th percentile 27.0 1.6 n/a 48.5 34.0 211.3 90.4 n/a 267.1 223.0 216.3 110.2 n/a 267.1 229.2 Median 8.0 -3.1 n/a 18.2 27.0 127.4 27.0 n/a 186.7 179.3 136.1 73.7 n/a 191.5 197.0 75th percentile -3.8 -14.7 n/a 6.7 15.4 28.9 8.1 n/a 130.9 157.8 73.7 32.0 n/a 137.6 178.4 90th percentile -18.4 -24.4 n/a -6.2 n/a 2.7 0.0 n/a 76.8 n/a 25.8 7.3 n/a 84.8 n/a Inter-decile range 68.5 32.3 n/a 69.0 n/a 266.5 123.6 n/a 271.3 n/a 252.0 126.3 n/a 263.3 n/a Range of returns 90.8 35.3 n/a 87.4 24.5 397.5 152.7 n/a 397.5 105.2 398.2 153.5 n/a 398.2 112.5 50 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Appendix V – Since-inception range of returns by vintage year band and investment stage Continued

2003 to 2005 vintage funds

IRR (% p.a.) DPI TVPI Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO No. of funds 57 15 5 26 11 57 15 5 26 11 57 15 5 26 11 Pooled average 12.8 6.0 4.0 11.9 13.6 140.7 103.6 103.6 135.3 144.7 169.2 139.9 122.8 157.8 175.1 10th percentile 37.9 18.6 n/a 54.0 34.0 258.3 171.6 n/a 319.0 245.9 264.6 254.6 n/a 335.1 266.2 25th percentile 20.2 2.2 14.8 34.4 26.7 195.2 94.1 164.0 249.6 201.4 216.5 115.9 183.7 237.3 214.0 Median 9.2 -3.1 -2.8 12.8 15.0 135.2 28.0 83.9 153.3 150.8 146.1 79.5 89.2 163.7 194.5 75th percentile -3.1 -7.8 -4.1 -1.1 9.9 42.8 11.3 42.8 101.9 128.8 80.0 28.0 71.8 125.2 144.1 90th percentile -7.9 -41.2 n/a -7.4 -5.4 9.1 0.0 n/a 11.2 34.4 50.2 4.0 n/a 72.2 77.4 Inter-decile range 45.7 59.8 n/a 61.4 39.4 249.2 171.6 n/a 307.7 211.6 214.5 250.6 n/a 262.9 188.8 Range of returns 112.6 66.1 25.5 87.4 43.8 397.5 199.9 185.1 397.5 229.5 398.2 261.4 153.3 346.3 217.1

2004 to 2006 vintage funds

IRR (% p.a.) DPI TVPI Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO No. of funds 77 20 11 31 15 77 20 11 31 15 77 20 11 31 15 Pooled average 8.4 8.6 2.9 7.3 8.7 110.5 63.7 74.7 99.7 116.2 148.7 161.7 117.4 139.2 151.7 10th percentile 34.1 19.1 31.8 48.8 30.6 245.4 147.7 220.4 305.6 229.3 253.3 260.2 229.7 305.7 242.9 25th percentile 15.2 9.5 8.7 19.6 16.8 151.8 39.4 87.9 218.8 186.8 192.7 160.1 158.8 218.9 212.9 Median 6.3 -0.4 1.4 8.3 10.0 80.4 25.0 73.9 115.2 150.8 136.1 88.7 107.7 146.1 179.0 75th percentile -2.9 -6.6 -3.7 -1.1 5.7 27.3 3.1 40.1 61.4 99.3 84.0 51.5 74.3 95.2 135.5 90th percentile -7.6 -34.9 -5.5 -7.5 -7.8 6.2 0.0 25.6 17.2 17.8 54.8 18.3 69.6 65.3 62.5 Inter-decile range 41.7 54.0 37.3 56.2 38.4 239.2 147.7 194.8 288.4 211.5 198.5 241.9 160.1 240.3 180.4 Range of returns 123.7 69.6 42.9 98.5 43.8 397.5 199.9 222.5 397.5 246.9 398.2 304.0 175.7 346.3 217.1 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015 51

2005 to 2007 vintage funds

IRR (% p.a.) DPI TVPI Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO No. of funds 104 30 14 43 17 104 30 14 43 17 104 30 14 43 17 Pooled average 8.3 8.8 5.2 7.7 8.5 105.4 63.8 72.6 97.4 110.1 147.8 158.3 129.9 141.3 149.5 10th percentile 21.0 18.1 25.2 35.4 16.2 200.6 117.7 183.4 286.3 189.7 246.4 249.9 207.7 286.3 215.1 25th percentile 13.1 11.2 9.2 19.6 10.7 129.4 64.8 88.1 173.8 150.8 173.2 171.3 161.1 188.3 183.4 Median 7.5 1.0 2.8 10.4 9.3 74.1 27.6 73.6 102.5 115.2 143.1 106.9 116.8 148.6 147.3 75th percentile -0.7 -4.4 -3.0 1.3 5.4 24.9 7.9 36.0 46.8 81.7 94.9 69.3 85.4 107.0 126.3 90th percentile -7.5 -21.6 -7.2 -4.5 -7.6 7.6 0.0 19.9 9.4 21.3 57.8 29.5 62.0 67.1 63.1 Inter-decile range 28.5 39.7 32.4 39.8 23.8 193.0 117.7 163.5 276.9 168.4 188.6 220.3 145.7 219.2 152.1 Range of returns 123.7 69.6 45.7 88.0 29.0 560.1 199.9 227.8 560.1 194.0 560.1 286.7 191.5 560.1 158.8

2006 to 2008 vintage funds

IRR (% p.a.) DPI TVPI Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO No. of funds 101 29 17 39 16 101 29 17 39 16 101 29 17 39 16 Pooled average 7.6 8.7 11.5 7.7 7.5 88.5 53.6 91.1 88.4 89.8 139.9 155.7 152.1 138.8 139.3 10th percentile 27.2 18.0 55.8 40.2 12.3 186.7 102.3 340.6 291.2 167.8 247.2 247.8 340.7 291.2 181.6 25th percentile 12.3 11.3 13.0 19.9 10.9 117.3 54.0 108.4 159.6 118.8 170.5 171.7 170.5 179.8 153.4 Median 8.3 2.6 8.6 10.4 8.8 72.6 24.1 74.1 81.9 96.4 144.2 111.1 144.2 148.6 144.6 75th percentile 0.8 -1.2 0.6 2.5 4.5 23.8 0.8 41.5 35.9 59.6 104.8 81.2 103.5 110.6 118.9 90th percentile -5.6 -6.0 -6.3 -1.2 -23.6 2.6 0.0 21.5 8.1 7.3 67.6 50.3 67.1 72.4 48.4 Inter-decile range 32.8 23.9 62.1 41.4 35.9 184.2 102.3 319.1 283.1 160.5 179.6 197.4 273.6 218.8 133.2 Range of returns 138.1 56.4 81.1 88.0 75.9 723.0 186.5 705.8 560.1 179.6 723.1 610.1 669.5 560.1 174.9 52 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Appendix V – Since-inception range of returns by vintage year band and investment stage Continued

2007 to 2009 vintage funds

IRR (% p.a.) DPI TVPI Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO No. of funds 83 26 13 33 11 83 26 13 33 11 83 26 13 33 11 Pooled average 9.8 9.5 11.6 10.1 9.6 88.3 50.3 82.1 89.0 89.9 145.2 149.7 148.3 143.8 145.3 10th percentile 37.4 25.5 64.1 40.0 12.9 207.9 151.3 495.2 354.5 139.6 276.1 251.2 542.6 383.7 160.5 25th percentile 15.7 13.8 34.0 22.3 11.1 120.0 64.8 114.6 169.7 115.2 171.4 175.5 171.0 184.0 149.5 Median 10.1 4.1 10.7 10.9 9.3 66.0 24.5 73.3 85.8 87.3 144.9 117.9 153.4 152.9 144.2 75th percentile 2.5 -2.7 -1.0 6.6 5.1 17.3 0.0 14.7 38.4 57.5 110.6 72.8 99.7 127.9 125.1 90th percentile -6.1 -10.9 -7.4 0.5 -48.1 0.0 0.0 2.7 3.1 10.7 65.8 44.2 63.0 84.4 33.6 Inter-decile range 43.5 36.4 71.6 39.5 61.0 207.9 151.3 492.5 351.3 128.9 210.3 207.0 479.6 299.4 126.9 Range of returns 138.0 65.0 81.1 88.6 74.5 723.0 222.2 723.0 560.1 137.3 723.1 610.1 669.5 560.1 149.2

2008 to 2010 vintage funds

IRR (% p.a.) DPI TVPI Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO No. of funds 61 19 16 20 6 61 19 16 20 6 61 19 16 20 6 Pooled average 11.1 10.2 21.2 13.1 10.1 73.7 31.1 85.2 72.8 75.4 142.7 142.9 168.3 148.7 139.6 10th percentile 44.1 33.8 57.9 73.6 n/a 215.0 186.5 324.3 356.3 n/a 287.9 259.1 407.3 395.1 n/a 25th percentile 19.4 19.4 30.4 35.7 11.8 101.0 35.3 124.4 166.6 88.8 172.4 173.5 231.0 179.4 145.5 Median 11.1 4.4 14.0 11.7 11.1 35.9 10.5 49.0 71.8 70.2 140.0 116.3 151.5 144.4 142.3 75th percentile 0.1 -6.0 -2.5 7.8 -12.0 6.9 0.0 8.0 30.1 20.2 100.7 66.9 94.0 130.1 90.8 90th percentile -9.6 -16.1 -14.6 -8.3 n/a 0.0 0.0 0.0 2.4 n/a 65.4 55.1 57.0 74.6 n/a Inter-decile range 53.7 49.9 72.4 81.9 n/a 215.0 186.5 324.3 353.9 n/a 222.5 203.9 350.3 320.5 n/a Range of returns 161.9 58.8 107.7 112.5 74.5 1,002.8 222.2 723.0 1,000.7 86.4 1669.8 610.1 713.3 1612.4 134.5 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015 53

2009 to 2011 vintage funds

IRR (% p.a.) DPI TVPI Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO Subtotal Venture Small MBO Mid MBO Large MBO No. of funds 54 18 15 19 2 54 18 15 19 2 54 18 15 19 2 Pooled average 18.5 11.7 17.9 21.8 n/a 71.8 39.4 42.1 82.3 n/a 158.5 145.8 160.3 167.3 n/a 10th percentile 41.1 24.5 39.8 73.1 n/a 219.0 144.8 146.1 350.8 n/a 271.4 218.0 271.3 431.6 n/a 25th percentile 22.4 19.4 22.7 37.1 n/a 93.9 38.6 63.1 215.9 n/a 177.5 162.5 181.8 242.2 n/a Median 12.3 4.8 15.4 12.9 n/a 26.4 10.2 15.6 57.8 n/a 137.2 117.0 136.5 144.3 n/a 75th percentile -1.5 -6.8 -0.1 8.0 n/a 2.6 0.0 0.0 28.1 n/a 96.5 66.7 99.7 126.0 n/a 90th percentile -10.3 -17.0 -17.5 -7.0 n/a 0.0 0.0 0.0 2.2 n/a 66.6 53.3 50.2 78.3 n/a Inter-decile range 51.3 41.5 57.3 80.1 n/a 219.0 144.8 146.1 348.6 n/a 204.8 164.7 221.0 353.3 n/a Range of returns 135.8 64.3 85.7 112.5 n/a 1,002.8 222.2 153.4 1,002.2 n/a 1660.0 222.8 262.1 1600.5 n/a 54 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Appendix VI – Worked examples

Sample carried interest calculation to An interim IRR is a ‘snapshot’ of performance to Sample interim IRR calculation for a fund produce an interim IRR (as of 31 Dec 2012) date. In calculating an interim IRR, the assumption used is that the fund is wound up at the NAV date Fund size – £20 million (i.e. 31 December 2012) and that the residual Cash flow date Amount (£) Comment Draw down – £17 million (85%) value is distributed according to the above. 1 Feb 08 -2,000,000 10% draw down from investors Distributed – £12.25 million As the fund is not fully drawn down, one of two 10 Jun 08 -2,000,000 10% draw down from investors Residual net asset value (NAV) at 31 December assumptions can be made, each of which has 25 Nov 08 -2,000,000 10% draw down from investors the same effect on the IRR calculation: 2012 (before carried interest) – £12 million. 3 Apr 09 -2,000,000 10% draw down from investors 9 Sep 09 -2,000,000 10% draw down from investors Distribution Priority i) The £3 million not yet drawn down is cancelled and commitments correspondingly i) 100% to investors until commitments returned; 12 Dec 09 -2,000,000 10% draw down from investors drop to £17 million; or 5 May 10 -2,000,000 10% draw down from investors ii) 100% to investors until a ‘preferred return’ ii) The £3 million is drawn down on 15 Oct 10 1,500,000 Cash distribution to investors of 10% pa compound is achieved; 31 December 2012 and distributed 11 Nov 10 -1,000,000 5% draw down from investors simultaneously. iii) 100% to manager until payments 29 Mar 11 2,500,000 Cash distribution to investors equal 25% of ii); The example given on the right produces an 27 Jun 11 1,000,000 Cash distribution to investors interim IRR before carried interest of 12.9% and iv) 80% to investors, 20% to manager thereafter. 18 Sep 11 -2,000,000 10% draw down from investors 10.7% pa after carried interest. The latter figure is the one used in the BVCA Performance 29 Apr 12 3,000,000 Cash distribution to investors Measurement Survey. 12 Aug 12 1,500,000 Cash distribution to investors 15 Dec 12 2,750,000 Cash distribution to investors 31 Dec 12 12,000,000 Residual NAV

NB. All figures have been calculated using Microsoft Excel and the IRRs using the XIRR function in the same programme. BVCA Private Equity and Venture Capital Performance Measurement Survey 2015 55

The NAV required to produce the preferred Of the £12,000,000 residual NAV, £11,409,523 has been allocated as follows: return to investors at 31 December 2012 is £10,077,618 in accordance with Distribution £4,750,000 To the investors to make draw downs equal to distributions (£17mn-£12.25mn) – i) Priority ii) leaving an excess of £1,922,382 £5,327,618 To the investors to produce the preferred return – ii) to be allocated between the investors and the manager. £1,331,905 To the manager to produce 20% of gains at the preferred return point – iii)

At this point, the minimum gain attributable £11,409,523 to investors would be £5,327,618 (£10,077,618 + £12,250,000 – £17,000,000).

As investors would have received the The residual £590,477 (£12,000,000-£11,409,523) is to be allocated in accordance with condition iv): preferred return (the fund being ‘wound up’ at this date), the manager becomes entitled £472,382 To the investors to an amount equivalent to 20% of this minimum gain from the excess of £1,922,382. The manager £118,095 To the manager is thus entitled to 25% of the minimum gain achieved (i.e. £1,331,905) in accordance with iii) £590,477 plus 20% of the remaining excess of £590,477 (£1,922,382 – £1,331,905). The manager would now have received 20% of the gain, that is, 20% of (£5,327,618 + £1,331,905 + £590,477). In this way, the £12,000,000 residual NAV has been allocated as follows:

£10,550,000 To the investors

£1,450,000 To the manager

£12,000,000

It will be noted that the manager has received 20% of net gains (£1,450,000 being 25% of (£10,550,000 + £12,250,000-£17,000,000)). NB. If the residual NAV had been £10,077,618 condition iii) could not be fulfilled in its entirety and the interim IRR would be exactly 10% pa. 56 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Appendix VII – List of responding managers

3i Bridgepoint Episode 1 Ventures Kings Park Capital

Abingworth Management Ltd Bridgepoint Development Capital Equistone Partners Europe Kohlberg Kravis Roberts & Co Ltd (formerly Hermes) (formely Barclays Private Equity Limited) Active Private Equity Advisory LLP Langholm Capital LLP Bridges Community Ventures Limited Exponent Private Equity LLP Amadeus Capital Partners Limited LGV Cabot Square Capital LLP FF&P Private Equity Ltd AnaCap Financial Partners LLP Lion Capital CBPE Capital LLP Finance Wales Investments Limited Apax Partners Livingbridge (Formerly ISIS EP LLP) Cinven G Square Healthcare Private Equity Apposite Capital Lyceum Capital Partners LLP Clarendon Fund Managers Limited Graphite Capital Management LLP August Equity LLP Midven Limited CVC Capital Partners Limited Growth Capital Azini Capital Partners MMC Ventures Ltd Doughty Hanson & Co Ltd Helios Investment Partners LLP Bain Capital Ltd Montagu Private Equity LLP Duke Street (formerly Duke Street Capital) Herald Investment Management Limited Baird Capital Partners Europe MTI Dunedin Capital Partners Limited Hg Capital BC Partners Limited Next Wave Partners LLP ECI Partners LLP Infinity Asset Management LLP Beringea Ltd NorthEdge Capital Electra Partners LLP Inflexion Private Equity Bestport Ventures LLP Oxford Capital Partners Elysian Capital LLP Kester Capital LLP BlueGem Capital Partners LLP (formerly GCP Capital Partners LLP) Palamon Capital Partners, LP Endless LLP Bowmark Capital LLP Key Capital Partners LLP Palatine Private Equity LLP Enterprise Ventures (EV) Group (formerly Zeus Private Equity LLP) BVCA Private Equity and Venture Capital Performance Measurement Survey 2015 57

Panoramic Growth Equity Summit Group Ltd Notes

1. 93 managers responded to the survey and these Penta Capital Partners Ltd Sussex Place Ventures managers were full BVCA members as at 31 December 2015 (the vast majority of those firms that manage Permira Advisers LLP TDR Capital LLP funds eligible for the report).

PHD Equity Partners Technology Venture Partners 2. Many private equity firms manage more than one fund.

3. Those full BVCA members not listed above either do not Phoenix Equity Partners Terra Firma Capital Partners Limited raise third-party funds (i.e. invest their own or parent company money only), manage VCTs or government Piper PE LLP Top Technology Ventures Limited funds, or do not manage their funds from the UK, and therefore are not eligible to be included in this survey. Primary Capital Ltd TowerBrook Capital Partners (UK) LLP 4. A number of past BVCA members’ funds remain within the dataset (see Methodology as detailed in Appendix I) Risk Capital Partners Vespa Capital and are not listed here – most of these funds have come to the end of their lives. RJD Partners Limited Vision Capital Ltd

Rutland Partners LLP Wyvern Asset Management (formally Sulis Investment) Scottish Equity Partners YFM Private Equity Limited Silverfleet YFM Venture Finance Ltd Solingen Private Equity

Sovereign Capital Partners LLP

SPARK Ventures plc

STAR Capital Partners 58 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Appendix VIII – Frequently asked questions

What is the purpose of the survey? These groups have been excluded because What is the response rate for the survey? Why have funds with vintages of 1996 93 managers responded to the survey and these the purpose of the survey is to show institutional In total, 93 BVCA members responded to the onwards been reclassified? managers were full BVCA members as at investors the kind of returns they might attain survey in 2015, representing 96% of the firms This was done in order to reflect changes in the 31 December 2015 (the vast majority of those if they invested in UK-based private equity funds that manage funds eligible to be included. Many market. It was decided that 1996 was the most firms that manage funds eligible for the report). (which are often structured as limited firms manage more than one fund. In total, 586 appropriate point at which to do this, as it was partnerships). The performance of these funds were analysed in this year’s survey. around this time that the market started to ‘independent’ funds is calculated in a different noticeably change, with a large rise in the number Who is included in the survey? way from quoted vehicles and therefore cannot The BVCA recognises the importance of of venture capital funds and significantly larger be combined in the same sample. Listed private producing the most comprehensive performance To be eligible for inclusion in the survey, buyout funds being raised. The new categories equity is, however, shown as a separate category data possible and therefore it is a condition of the private equity firm must: and their size-bandings (i.e. size of equity in the report for comparison purposes. BVCA membership that the data is provided. investments) are as follows: • Be a full BVCA member;5 Firms that only invest directly from their own Who produces the survey? • Venture; • Raise money from third-party investors; balance sheet are excluded because they do not The survey is conducted by PwC’s International manage a fund into which an institutional • Small MBO (< £10mn); • Manage that money from the UK Survey Unit (ISU) in conjunction with Capital investor would be able to invest. Such firms will Dynamics and the BVCA. (although it may be invested elsewhere). not be able to report performance data net of • Mid MBO (£10mn–£100mn); costs and fees, as with the ‘independent’ funds. How is the data collected? The following are excluded: • Large MBO (> £100mn). BVCA members submit their cash flow and • BVCA members investing from their own Is the BVCA membership representative of valuation data for qualifying funds via the balance sheet; the UK private equity industry? BVCA’s online data collection portal. The data • Quoted vehicles managed by BVCA members The BVCA represents the vast majority of private is then provided to PwC ISU for analysis by such as VCTs and listed private equity equity and venture capital in the UK, with just investment stage and vintage year, with (formerly known as private equity investment over 217 full members – firms that provide verification, where appropriate, undertaken trusts), although the latter are shown as a private equity or venture capital funding to by Capital Dynamics. separate category unquoted companies. The BVCA then produces a summary flyer in June, with the full report compiled by PwC and the BVCA published by August.

5. Funds managed by former members of the BVCA have been included where information has been available, but these are few and most are no longer active within the UK private equity industry. Only past members that still have active funds and continue to provide data are listed as having responded to the survey. BVCA Private Equity and Venture Capital Performance Measurement Survey 2015 59

Appendix VIII – Frequently asked questions

Continued

Does this allow for greater breakdown of The returns are based on fund valuations What are the International Private Equity and Can you compare IRRs to the returns the data? provided by the fund manager. How robust Venture Capital Valuation (IPEV) Guidelines? generated by other asset classes? Yes. Reducing the number of categories makes are these numbers? The International Valuation Guidelines were Most other asset classes, including the State Street it easier to break out vintage year data by stage Sixty-two per cent of the funds surveyed contain initially launched in March 2005, having been Global Services Pension Funds Universe and other category. From 1996 vintages onwards, vintage unrealised investments. As part of the online developed by the Association Française des comparative indices quoted in this report, are years are analysed by Venture, Small/Mid-MBO data collection process, respondents are asked Investisseurs en Capital (AFIC), the British Private calculated as gross time-weighted returns (TWR) and Mid/Large MBO stages. Due to some very whether fund valuations have been based on the Equity and Venture Capital Association (BVCA) and so any comparison should be done with care. small sample sizes, the MBO categories have new International Private Equity and Venture and Invest Europe, and endorsed by 30 regional Such TWR calculations are not possible for private had to be combined when comparing with Capital Valuation (IPEV) Guidelines and, if not, and national associations, including the equity as they require frequent and easily Venture. This further breakdown of vintage what valuation method has been used. However, Institutional Limited Partners Association (ILPA) obtainable revaluations and assume a low level year returns will be useful when benchmarking PwC has not independently confirmed that the in the USA. These replaced the previously of manager discretion in the timing of cash flows. funds. It is hoped that this will increase the International Guidelines have been adhered to. widely used BVCA Valuation Guidelines. Is the IRR net or gross? usefulness of the survey to investors and For more information, please visit: It should be remembered that, as with other asset practitioners alike. http://www.privateequityvaluation.com/ The private equity return represents the ‘net’ return classes, a valuation provides an interim to investors after costs and fees. Provision is made How are the returns calculated? ‘snapshot’ of performance. The distributing Why is the internal rate of return (IRR) used? for performance fees, which would have been nature of the vast majority of private equity The primary method for calculating returns is The IRR is the most appropriate measure of payable if the residual valuation had been realised funds means that when a fund has made its based on the annualised internal rate of return return due to the high level of discretion on the at the valuation date. Returns from the State Street final distribution, a pure cash-on-cash return (IRR) achieved over a period of time. This return part of the fund manager in determining cash Global Services Pension Funds Assets and FTSE can be calculated. is based upon the total actual fund cash flows and flows to and from the investors and the difficulty indices, however, are gross time-weighted returns. valuations of the funds at the relevant period in determining portfolio valuations at the date of Thus, private equity returns are effectively ends and the calculation of the change between each cash flow that would be required in order understated in comparison. them on a per annum basis. The returns are to calculate a time-weighted return. The academic Why is the net IRR used? therefore time- and money- weighted (often community and the CFA Institute (formerly AIMR referred to as ‘time line basis’). – Association of Investment Management The net IRR is the most appropriate measure of Research) supports the use of the IRR as the performance as this is the return that is generated most appropriate measure of private equity to the investor. While gross IRRs are important for and venture capital fund performance. measuring individual investments, the effects of costs and fees can significantly reduce the gross returns when the totality of the fund is examined. 60 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Why are different types of net IRR reported? Why is the complete dataset 586 funds in Why are multiples also quoted? How transparent is the UK private ‘Since inception’ returns are the most meaningful some cases and 518 in others? The IRR is not the only important measure of equity industry? way to measure private equity performance. The since-inception returns have a reduced performance for private equity and venture The private equity industry is mindful of the They measure from the actual start of the fund dataset compared to the medium to longer-term capital funds. Multiples are a useful additional need for appropriate levels of transparency, (i.e. from the first drawdown) up to a particular returns, because only funds over four years old measure that can be used in conjunction with given its high profile in the media and its point in time. This, therefore, most closely are included in the former. The reason for this is IRRs when comparing the relative performance importance to the wider success of the economy. reflects the return a primary investor would that short-term IRRs can be very volatile and are of funds. The multiple is shown in two ways: It must be remembered, however, that private have achieved. not a reliable indicator of progress. After four equity differs from public equity and that a years, the IRR has begun to settle down and is • As a percentage of paid-in capital distributed degree of privacy is an important component ‘Medium to long-term returns’ (three, five and ten thus a more meaningful indication of the to investors (DPI); of return generation. This survey was first years) are reported so that investors can compare direction of progress. commissioned by the BVCA in 1994 and • As a percentage of total value, which includes them with other asset classes, which is not demonstrated the desire and strategic vision possible with the since-inception numbers. Why is the pooled average IRR so different capital distributed and residual value (TVPI). of the BVCA to promote greater understanding These returns cover all activity in all funds in the from the median IRR in some populations? of the industry and to encourage greater survey over the measured period to 31 December; What is the impact of currency on The pooled average IRR is the return for the transparency regarding performance. it is not limited to just those funds that were in the returns? total sample of funds being analysed, whereas The proactive and continuous efforts to improve existence at the start of the measured period. All of the fund returns are calculated in pounds the median is the actual return of the middle the survey, such as the further breakdown of (N.B. These returns can be compared with the sterling. For those funds that are denominated ranking fund in the sample. The pooled average vintage year performance, are also made with ‘horizon’ returns produced by Invest Europe.) in other currencies, each cash flow and is influenced by larger funds in the sample, the desire for greater transparency in mind. whereas the median is size-neutral. valuation is converted to pounds sterling using Current (or one-) year returns are very volatile the relevant exchange rate prevailing at the date and inappropriate as a sensible measure of private of said cash flow or valuation. In this way, the equity performance. It is not possible to invest in a return calculated will be closest to that of a private equity fund for just one year. Private equity sterling-based investor. Although exchange rate is a long-term investment, spanning the life of a movements may have some significant impact fund. They can, however, be used as an indication on short to medium-term returns, their effect of how well the UK private equity industry on since-inception and long-term returns is performed in that one year. generally small. BVCA Private Equity and Venture Capital Performance Measurement Survey 2015 61 62 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015

Contacts

British Private Equity & Venture Capital Dynamics PricewaterhouseCoopers LLP Capital Association (BVCA) 9th Floor 7 More London Riverside 5th Floor East 9 Colmore Row London Chancery House Birmingham SE1 2RT 53-64 Chancery Lane B3 2BT London Tel: 020 7583 5000 WC2A 1QS Tel: 012 1200 8800 www.pwc.co.uk Tel: 020 7492 0400 www.capital-dynamics.com

[email protected] www.bvca.co.uk

Further Enquiries: Tim Hames, Director General, BVCA 020 7492 0466 Damian Regan, Private Equity Performance Assurance leader, PwC 020 7804 9984 Nastasja Vojvodic, Research Manager, BVCA 020 7692 0418 Mark Drugan, Managing Director, Capital Dynamics 0121 200 8805 BVCA Private Equity and Venture Capital Performance Measurement Survey 2015 63

Disclaimer The data within this report was collated and analysed by the PwC International Survey Unit in Belfast. While PwC, the BVCA and Capital Dynamics have made every effort to ensure the reliability of the data included in this report, they do not assume any responsibility for any inaccuracy in the data nor for the accuracy of the underlying amounts submitted by the participating private equity funds. The survey is based on valuations provided by each participating fund; PwC has not independently checked the valuation data, nor confirmed that the International Private Equity and Venture Capital Valuation Guidelines have been adhered to.

The data used in the preparation of the report has been collated and analysed by PwC International Survey Unit in Belfast, but has not been independently verified, validated or audited by PwC.

This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. © 2016 PricewaterhouseCoopers LLP. All rights reserved. In this document, “PwC” refers to the UK member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. Design & Media – The Studio 31319 (11/16)