Global venture capital funds recorded the best performance of any private capital strategy in the first quarter of 2021, according to The latest PitchBook benchmarks, with an IRR of 19.8%.

Buyout and growth funds ranked second and third, at 17.8% and 17.1%, respectively, before significantly lower results for other strategies.

The trend for venture capital and private equity to stand out in terms of performance has been going on for several years (see the quilt chart below). This has attracted more and more attention in the broader financial landscape, as many of America’s largest university endowments have recently reported astronomical gains, strongly boosted by allocations to alternative assets.

Looking ahead, PitchBook’s preliminary performance data for Q2 2021 also shows venture capital to rank number one in private strategies, followed by funds of funds, secondaries, and debt.

“Over the past year, the record trading and exit environment for venture capital and private equity has led to a breakneck pace of value creation, both realized and on paper,” Zane said. Carmean, quantitative research analyst at PitchBook. “We will be watching closely for a potential average regression caused by COVID variants, inflation, the job market, and other macroeconomic risks.”

At the other end of the performance spectrum for the first quarter of 2021 were real estate and real estate assets, with respective IRRs of 5.4% and 3.4%.

Private real estate funds have undoubtedly had a few rough years, and uncertainty over the pandemic has contributed to the decline in strategy dry powder levels in 2020 for the first time in almost a decade.

With real strengths, it is a story with mixed scenarios. The infrastructure has remained fairly stable and could be boosted if President Biden’s infrastructure plan is passed. While the recent fortunes of oil and gas investors have been much worse, although the trend has turned more positive during the second half of 2020 and the first quarter of 2021.

“Rising energy commodity markets and weak capital spending to expand supply are possible tailwinds to watch in the traditional energy space,” Carmean said.

Related research

PitchBook Benchmarks provides a single destination that tracks overall fund performance across a range of strategies by measuring cash multiples, IRR and other metrics.

The latest reports, containing data up to the first quarter of 2021, are available here. You can access separate editions for the following fund types and geographic areas:

• Global
• North America
• Europe
• Capital risk
• Capital investment
• Fund of funds
• Secondary

Are you curious how closely private fund strategies like PE and VC correlate in terms of performance?

To see a correlation matrix based on quarterly returns for each asset class from Q1 2006 through Q1 2021, be sure to check out the first edition of our Quantitative perspective: overview of the US market.

This is one of many snapshots in the new report series that features nearly 70 pages of data and 75 charts, providing an overview of alternative markets and illuminating key trends across a range of investment strategies. .

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