Definition
Vintage Year (Fund)
A fund's vintage year is the year it makes its first investment or first draws capital, used to benchmark its performance against peers.
PE and VC fund returns are compared by vintage because funds raised in the same year invest into similar market conditions. A 2021-vintage fund that deployed at peak valuations faces a different environment from a 2009-vintage fund investing after a crash, so comparing across vintages can mislead.
LPs assess a GP by how its funds performed relative to other funds of the same vintage, measured on IRR, MOIC, DPI and TVPI. Vintage benchmarking is standard in evaluating fund managers' track records.
Related terms
- Internal Rate of Return (IRR)IRR is the annualised, time-weighted return on an investment that accounts for the timing of cash flows.
- TVPITVPI (Total Value to Paid-In) is the ratio of a fund's total value — realised distributions plus remaining holdings — to the capital LPs have paid in.
- DPIDPI (Distributions to Paid-In) measures how much cash a fund has actually returned to its investors relative to the capital they paid in.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.