In the opaque and secretive world of venture capital, performance can be hard to gauge. Funds often keep their returns close to the chest—only disclosing them to their own investors (limited partners, or LPs) and making it difficult to compare performance from manager to manager without being invested in every fund. PitchBook, a widely-used industry resource on private markets data, wants to capitalize on making it a little easier.
PitchBook just released a set of new tools focused around manager scores, which rank fund managers based on factors including performance, a capital call score (the pace at which they call down funds from their LPs), and distributions (how often fund managers, in turn, return capital to their limited partners). Limited partners “don't have a lot of quantitative models that help them analyze where their risk parameters” really are, Nizar Tarhuni, vice president of institutional research and editorial at PitchBook, told me. “[It's] a lot of work for small foundations and endowments.” That’s particularly tricky at a time when LPs are being more judicious with their cash as exits—like public listings or acquisitions that return money to LPs—are harder to come by.
