Response from Catherine Lewis La Torre, Chief Executive Officer, British Patient Capital:
“Venture capital is a long-term asset class. Whilst it is not immune from the challenges presented by a worsening macro-economic environment, one of the benefits of the venture capital model is its ability to deliver strong performance across cycles.
British Business Bank’s fourth annual UK Venture Capital Financial Returns report demonstrates this robustness. It shows that UK VC funds with 2008 to 2013 vintages generated a pooled Total Value to Paid In Capital (TVPI)¹ multiple of 2.20, 0.11 points higher than last year.
What is particularly encouraging is how UK VC continues to keep pace with the US market. Whilst US funds with a vintage of 2002 to 2017 performed better when measured by Distributions to Paid In Capital (DPI)² – 0.84 in the UK compared to 1.19 in the US – when using TVPI, the difference is very small – 2.27 for UK funds, and 2.31 for the US.
There will doubtless be tough times ahead. Fundraising is slowing. Exits are becoming harder to secure. Valuations are falling. Next year’s data may well paint a different picture. But ultimately, as the largest domestic investor into UK venture and venture growth capital funds, British Patient Capital remains convinced of the fundamental strength of the UK innovation economy and the importance of venture capital in driving sustainable growth.”
¹ Total Value to Paid In (TVPI) is the ratio of the current value of remaining portfolio investments within a fund, plus the total value of all distributions from exits to date, relative to the total amount of capital paid into the fund to date.
² Distribution to Paid-In (DPI) is a measure of the cumulative distributions returned to the investor from portfolio company exits relative to the total amount of capital paid into the fund to date.
Notes to Editors
The British Business Bank’s UK Venture Capital Financial Returns 2022 report can be found on the website.
About British Patient Capital
British Patient Capital is the trading name of British Patient Capital Limited, a wholly-owned commercial subsidiary of British Business Bank plc, the UK government’s economic development bank. It forms part of the British Business Bank plc’s commercial arm.
Its mission is to enable long-term investment in innovative firms led by ambitious entrepreneurs who want to build large scale businesses. Launched in June 2018, British Patient Capital has £2.5 billion to invest over 10 years in venture and venture growth capital to support high growth potential innovative UK businesses in accessing the long-term financing they require to scale up. Find out more at British Patient Capital.
British Business Bank plc and its subsidiary entities are not banking institutions and do not operate as such. They are not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). A complete legal structure chart for British Business Bank plc and its subsidiaries can be found on the British Business Bank plc website.
British Patient Capital makes commitments and invests on its own behalf and on behalf of third-party investors whose investments British Patient Capital manages.