Global venture returns soared in 2018; Western Europe outperformed

The performance of venture funds worldwide soared in 2018, making the year the best on record.

That’s according to a report by private equity financial software provider eFront, which said that venture funds last year far exceeded historical performance averages.

VC returns, as measured by multiples on invested capital, reached 1.531x in in the first quarter of last year, eFront reported. Returns then dipped to below 1.5x in the first quarter of 2019. Still, multiples on invested capital have now hovered between 1.45x and 1.53x during the past eight quarters.

Additionally, eFront reported that the time to exit is trending downwards since the record high seen at the end of 2015, and now sits at about 3.3 years. Part of the explanation could be a favorable environment for IPOs on the U.S. stock markets. Also, firms are perhaps being more judicious in making new investments that are easier to exit.

Meanwhile, Western European VC funds continue to significantly outperform the long-term average, with 2010 funds performing particularly strongly, eFront reported. All vintage years from 2010 onwards are now outperforming the historical average, with Q4 2018 and Q1 2019 continuing this trend.

Tarek Chouman, CEO of eFront, described the Western European VC performance as a “potential renaissance for European venture capital funds.”

Action Item: The full report can be accessed here: