State of The Market Venture CapitalPrivate Equity（一）.pptVIP

Private Equity Performance 2004Risk and Return What is Risk? Risk is not volatility Manager risk is the real issue Risk of timing Wrong subasset class or lack of diversification Average Portfolio ValuationsUS Venture Capital Funds Average Portfolio ValuationsUS Buyout Funds Annual Percent Net Change in Portfolio Valuations US Venture and Buyout Formed 1969-2003 Annual Percent Net Change in Portfolio Valuations European Venture and Buyout Funds Formed 1969-2003 Net Change in Portfolio Valuations from 12/31/2000-12/31/2002US Venture and Buyout Funds Formed 1969-2002 Performance Good years outnumber bad years Still good long term asset class but This has to be a dollar cost averaging business Temporal Allocation has to be done – or lead to gambler’s ruin Funds performance may be pulled down by their size Distributions by US Private Equity Funds1990-2003 US Venture FundsAnnualized Net Cumulative IRR by Vintage Year US Buyout FundsAnnualized Net Cumulative IRR by Vintage Year US Venture Capital Partnership ReturnsFunds Formed 1969-2002 (Annual Returns by Calendar Year) US Buyout Partnership ReturnsFunds Formed 1969-2002 (Annual Returns By Calendar Year) The Jcurve gets longer Jcurves get Compounded in A portfolioVC Jcurves 1980-02 Jcurves get Compounded in A portfolioVC Jcurves 1980-02 The Jcurve ProblemVC Funds Formed 1980-2002 Net Cashflows The Jcurve ProblemLBO Funds Formed 1980-2002 Net Cashflows The Jcurve ProblemVCLBO Funds Formed 1980-2002 Net Cashflows The Jcurve ProblemVC Funds Formed 1980-2002 Net Cashflows The Jcurve ProblemLBO Funds Formed 1980-2002 Net Cashflows The Jcurve ProblemSmall LBO Funds Formed 1980-2002 Industry Net Cashflows(Funds Size 0-$250 Mill) The Jcurve ProblemMedium LBO Funds Formed 1980-2002 Industry Net Cashflows(Fund Size $250-$500 mill) The Jcurve ProblemLarge LBO Funds Formed 1980-2002 Industry Net Cashflows(Fund Size $500m - $1bill) The Jcurve ProblemMega LBO Funds Formed 1980-2002 Industry Net C