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British Patient Capital Response to UK Venture Capital Financial Returns Report 2020

Insights 12 November 2020

Response from Judith Hartley, Chief Executive Officer, British Patient Capital

Judith Hartley, CEO, British Patient Capital said:

The latest report from the British Business Bank, UK Venture Capital Financial Returns, builds on the findings of last year’s report, and for the first time gives analysis of UK fund manager performance by investment stage, size of fund and location of fund manager. It is an important contribution to increasing the understanding of the asset class.

By drawing on data from British Business Bank including British Patient Capital portfolio funds, complementing this with a survey of fund managers in the market and working with other data providers, the report is an important step forward to improving the quality of data available to the market.

The analysis confirms that a relatively small number of funds generate very large returns. Of the 145 funds that reported TVPI Multiples, eight generate a return of above 3x, 17 generate a return between 2x and 3xTVPI multiples for fund vintages from 2002 – 2018. Half of funds generate a TVPI return of 1.23x or less. British Patient Capital seeks to invest in best in class fund managers and this research shows very clearly why, in venture capital, robust fund manager selection is crucial when trying to capture superior returns.

While the report also shows that Early Stage venture funds have the potential to generate higher returns, these returns also tend to be more variable. Returns from Later Stage funds are comparatively lower though such funds are relatively few in number. Where Later Stage funds do exist, they also tend to be newer and hence, have had less time to generate returns, which makes a like-for-like comparison more difficult. British Patient Capital is currently focussing its investment activity primarily on venture growth opportunities, increasing the overall number of funds in this area. As these investments mature, this will help strengthen the evidence base for funds at Series B+, so that a more robust comparison of returns across different fund stages can be made.

With interest in UK biotech at an all-time high, the report’s deep dive into the performance of UK Life Sciences venture funds is particularly timely. Many life sciences companies are currently small but have the high-growth potential to become global leaders in their specialist fields. Venture capital funding will be crucial to enabling these companies to achieve their full potential.

Further Information

Notes to editors

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’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 £2.5bn 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 Business Bank plc and its principal operating subsidiaries are not banking institutions and do not operate as such. Neither British Business Bank nor its principal operating subsidiaries are 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.