Backing Britain, Delivering for Members

VenCap

David Clark

Research

3 Pages

David Clark of VenCap looks at how UK pension funds should fit their commitment to the UK Scale-up Fund within a broader venture program. He argues growth stage returns follow a power law much like early stage venture and that a globally built portfolio of proven managers can complement a UK focused allocation.

Key Takeaways

Losses Are Common: Over 41% of 2,865 growth stage investments by VenCap's underlying funds failed to return invested capital.
Power Law Outcomes: Just 4.7% of scale-ups returned more than 10x their cost, yet they produced 49.9% of total value.
Median Is Not Enough: The median UK venture fund from 2002 to 2020 vintages delivered a 1.48x net TVPI and a 10.3% net IRR.
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