Venture capital performance showed positive returns across all investment horizons ending
The one-year private equity performance index (PEPI) showed the greatest change from the fourth quarter 2007, with a 7.6 point decrease to 13.3% in first quarter 2008. Historically, short-term horizons show significant fluctuations quarter over quarter based on large exits impacting the return.
The next largest consecutive quarterly change occurred in the ten-year time horizon where PEPI decreased by 1.1 points quarter-over-quarter. Three year performance also posted a modest decline from the previous quarter, decreasing 0.2 percentage points from 9.7% in fourth quarter 2007 to 9.5% in first quarter 2008. Five-year and twenty-year performance figures showed modest quarter-over quarter increases to 9.1% and 16.8%, respectively.
"The IPO market has now been essentially shut down for venture-backed companies for over seven months. Combined with a skittish M&A market, shorter term performance returns are and will continue to be impacted," said Mark Heesen, president of the NVCA. "That said, our asset class continues to out perform many other investment alternatives including the public markets over the long term. But we will need to see the exit markets improve dramatically to maintain that position in the coming year."
