British Patient Capital response to UK Venture Capital Financial Returns 2022 report

“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)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. 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)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. – 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.”