About the report

Venture capital (VC) epitomised the blockbuster year that all private market assets had in 2021. The asset class has cemented its place as one of the best ways to capitalise on both innovation and disruption and for the risk-willing investor, the rewards can be far greater when compared with other private market investments. The report provides an overview of venture capital and how investors can benefit from its inclusion in their portfolios.

Key highlights

• Investing momentum to continue at a healthier pace On almost every level, 2021 was a phenomenal 12 months for VC and also quite clearly an outlier. If the pace of dealmaking for the final six months of 2021 was extrapolated for a full year, the total deal value would have outstripped the existing dry powder. This isn’t sustainable and as we go through 2022, a drop off from last year has been inevitable.
• Venture capital is a game of home runs VC is about banking on high growth from a select few investments that generate enough of a return to cover the losses from all the others. This is why a good manager is so important. Top VC managers know the market and know how to build a portfolio that generates enough home runs to more than make up for the strike-outs.
• The portfolio benefits of venture capital When you look at the major successes of VC-backed startups such as WhatsApp, Uber and AirBnB, which are outlier success stories, there is one clear benefit to adding VC to your portfolio: larger return potential. But the benefits go much deeper than that.
• VC is now a global opportunity VC is no longer Silicon Valley-centric. It has gone global, which allows for further diversification opportunities. Not considering VC now means forgoing exposure to disruptive and innovative companies which have the potential for huge returns, albeit with higher risk.