UK venture capital returns match the US, British Business Bank finds

UK venture capital returns have matched those of the United States across two decades of funds, according to research published by the British Business Bank on 29 September 2026. The state-owned development bank's UK Venture Capital Financial Returns 2026 report puts the pooled total value to paid-in capital (TVPI, a measure of what a fund's investments are worth, sold or not, relative to the money investors put in) at 1.78 for UK funds and 1.78 for US funds across funds started between 2002 and 2021.

London's financial district at dusk, seen from across the River Thames.

What the British Business Bank found on UK venture capital returns

The report draws on data from fund managers, the Bank's own investment portfolio, and the commercial data providers PitchBook and Preqin. It covers funds by vintage year, meaning the year a fund began investing, from 2002 to 2024.

For the 2020 to 2024 vintages, UK funds show a pooled TVPI of 1.40, against 1.24 for the United States and 1.27 for the rest of Europe. Among early-stage funds across the 2002 to 2024 vintages, the UK figure is 1.85, against 1.81 in the United States and 1.84 in the rest of Europe.

Late-stage funds, long the weaker part of the UK market, are closing the distance. The report puts UK late-stage TVPI for the 2020 to 2024 vintages at 1.18 against 1.23 for the United States, a gap of 0.05.

Why cash returns lag, and what Enterprise Capital Funds show

TVPI counts investments that have not been sold, so it depends partly on how funds value their holdings. Distributions to paid-in capital (DPI), which counts only cash actually returned to investors, tells a less flattering story. For the 2002 to 2021 vintages the report puts UK DPI at 0.62 against 0.83 in the United States.

The 2020 to 2024 funds are young and have had little time to sell holdings, so much of their 1.40 TVPI is likely to be valuation rather than cash. Pension schemes and other institutional investors tend to judge a fund manager on cash returned, which makes the DPI gap the number that matters most for the next round of fundraising.

The Bank's Enterprise Capital Funds programme, which co-invests with private investors in venture funds, reports a pooled DPI of 0.67 against 0.50 for the wider UK market, and a pooled TVPI of 1.73 against 1.71. The Bank also says that in more than 800 fund progressions, 39 per cent of funds following a top-quartile fund also reached the top quartile, and over 70 per cent stayed above the median.

What it means for UK founders and pension investors

Leandros Kalisperas, chief investment officer at the British Business Bank, said: “For many years, US venture capital has been seen as the world-leader. This research shows the UK is increasingly closing the gap, matching US returns overall and outperforming among the latest generation of funds.”

Michael Moore, chief executive of UK Private Capital, said: “Strong returns from British venture capital should be celebrated, but they also highlight an opportunity that domestic institutional investors are missing by underinvesting in this asset class.”

For founders, the practical question is where seed and Series A money comes from. Venture funds raise from limited partners (LPs), the pension schemes, endowments and family offices that supply the capital, and those investors follow evidence. This report gives UK fund managers a stronger case than they have had, at a time when Tech.eu's August funding figures put the UK at the top of Europe's fundraising table.

The evidence supports the argument for more domestic pension capital, with one condition: the cash has to come back. Faster and more regular ways to sell private company shares, such as the trading windows on PISCES, the FCA's regime for intermittent trading of private company shares, are one route by which realised returns could rise. The Bank's report does not test that, and nothing in it shows it yet. This is general information, not legal, tax or investment advice.

Key takeaways

• The British Business Bank reported on 29 September 2026 that UK venture funds from the 2002 to 2021 vintages have a pooled TVPI of 1.78, level with US funds.

• UK funds from the 2020 to 2024 vintages show a pooled TVPI of 1.40, against 1.24 for the United States and 1.27 for the rest of Europe, but these are young funds with limited cash returned.

• On realised cash returns, UK pooled DPI of 0.62 still trails the United States at 0.83 for the 2002 to 2021 vintages.

• The Bank's Enterprise Capital Funds programme reports a pooled DPI of 0.67, against 0.50 for the wider UK market.

Source: British Business Bank, UK Venture Capital Financial Returns 2026