The Evolution of Private Equity Fund Value

30 Pages Posted: 30 Jun 2020 Last revised: 3 Aug 2020

See all articles by Gregory W. Brown

Gregory W. Brown

University of North Carolina (UNC) at Chapel Hill - Finance Area

Wendy Hu


Jian Zhang

Adams Street Partners

Date Written: July 31, 2020


This paper provides the first large-sample analysis of buyout and venture capital fund values over their lifetimes. Specifically, we examine interim fund investment multiples (TVPIs), internal rates of return (IRRs), and direct-alphas based on the current reported net asset values (NAVs) at each quarter of a fund’s life. Using a sample of 1,400 mature buyout and VC funds, we find that the typical fund experiences a fall-off in returns after it is about 7 to 8 years old. However, the remaining performance is highly variable for funds of all ages and the dispersion in returns also tends to increase after funds are about 8 years old. We examine the cross-sectional determinants of remaining fund value and find that several fund-specific and market-wide factors determine future performance and that these vary by type and age of fund. For example, young funds tend to be harmed by high levels of market-wide dry powder whereas older funds appear to benefit.

Keywords: Private Equity, Venture Capital, Valuation, Net Asset Value, Performance, Secondary

JEL Classification: G11

Suggested Citation

Brown, Gregory W. and Hu, Wendy and Zhang, Jian, The Evolution of Private Equity Fund Value (July 31, 2020). Available at SSRN: or

Gregory W. Brown (Contact Author)

University of North Carolina (UNC) at Chapel Hill - Finance Area ( email )

Kenan-Flagler Business School
Chapel Hill, NC 27599-3490
United States

Wendy Hu

Burgiss ( email )

111 River St., 10th Floor
Hoboken, NJ 07030
United States

Jian Zhang

Adams Street Partners ( email )

1 N Upper Wacker Dr #22
Chicago, IL 60606

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