Into the red

Returns for US and European VCs and buyout funds slipped in the fourth quarter last year.

Venture capital funds in the US lost an average of 6.3 per cent in the fourth quarter of 2000. Buyout firms fared only slightly better, losing 2.5 per cent.

It’s the first time since the third quarter of 1998 that returns have been in the red and the fourth straight quarter of decline.

Over 2000 as a whole, venture capital funds gained 37.4 per cent. In 1999, the aggregate return was a staggering 165 per cent.

Buyout funds gained an average of 9.7 per cent in 2000.

The statistics were put together by Venture Economics from 1,625 US venture capital and buyout funds. Venture Economics used mark-to-market methodology as part of its returns calculations. The mark-to-market technique values portfolio companies against similar listed companies.