British Business Bank says UK venture returns now match America's

The British Business Bank has published new analysis of how UK venture capital funds have performed against their US and European counterparts.

Its finding, according to the Bank, is that UK funds have matched the United States on long-term fund performance.

The Bank also reports that the newest generation of UK funds is outperforming both US and European peers.

The measure used is pooled Total Value to Paid-In, or TVPI: the value a fund has returned plus the value it still holds, divided by the money investors put in. It is the standard way limited partners compare one fund against another.

The work appears in the Bank's UK Venture Capital Financial Returns report, which it produces periodically.

The claim matters because the comparison has historically run the other way. The received wisdom in British venture capital has been that domestic funds trail American ones, and that founders chasing the best backers should look west.

If the Bank's numbers hold, that argument weakens. A UK fund pitching a founder can now point to a public dataset rather than a hopeful anecdote.

For founders raising, the practical consequence is narrower than the headline suggests. Pooled returns describe the asset class, not the individual investor sitting across the table.

A strong average tells a founder that British funds as a group are returning capital, which is what keeps them able to raise their next fund and follow their money into later rounds. It does not tell them which cheque to take.

The newer-vintage finding carries the usual caveat about young funds. Recent vintages are valued largely on paper, because portfolio companies have not yet been sold or floated, and paper marks move.

The detailed TVPI figures and the vintage years behind them sit in the Bank's report rather than in the summary of it.

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