Venture capital funds topped their private equity counterparts during the 2nd quarter and both matched or beat most publicly traded equities, according to Cambridge Associates.
The Boston-based consulting firm tallies the performance of the VC and PE industries in a pair of indices culled from performance results from more than 5,400 private partnerships and their investments, according to a press release.
During the 2nd quarter, the firm’s VC index returned 4.3%, compared with 3.0% for the PE index. The NASDAQ composite index returned 4.2% during the quarter and the S&P 500 and the Dow Jones Industrial Average each put up 2.9%.
"This was the 6th quarter in a row that fund managers in the VC index distributed more money than they called. Four different vintages – 2004, 2005, 2006, and 2008 – each distributed more than $600 million to their LPs. On the call side, funds in just 2 vintage years, 2012 and 2008, contributed almost 44% of the total capital called during the quarter," Peter Mooradian, managing director of VC research, said in prepared remarks.
"Fund managers distributed the 2nd-largest quarterly amount of capital to their LPs in the more than 27-year history of the private equity index. Distributions have now outnumbered contributions for 6 consecutive quarters. This high level of distribution activity alongside strong public equity performance may cause LPs to be underweight private equity and perhaps explains a fundraising market that has felt a bit overheated," added senior consultant Keirsten Lawton.
Healthcare returned 7.9% for the VC index, the 2nd-best return behind the software sector’s 8.6%, according to the report. Software also led the PE index at 6.2%; healthcare returned 3.2%, Cambridge Associates said.
