A fund's vintage year is the year in which it makes its first investment or closes on commitments. Vintage year is one of the most important contextual factors in evaluating private fund performance because market conditions at the time of investment have a significant impact on returns. Funds that deploy capital during market downturns historically outperform those that invest at market peaks.
Vintage year benchmarking is the standard methodology for comparing fund performance. Rather than comparing a 2019 vintage fund against a 2012 vintage fund (which would be meaningless given different market conditions and fund maturity), industry practice compares funds within the same vintage year and strategy. Our fund performance database provides vintage-year peer group rankings.
The relationship between vintage year and performance is well-documented. Private equity funds with 2009-2012 vintages (post-GFC deployment) generated some of the highest returns in industry history. Conversely, 2006-2008 vintage funds (pre-crisis peak deployment) underperformed. Similar patterns exist around the dot-com crash, COVID-19 dislocation, and the 2022-2023 interest rate shock.
For portfolio construction, vintage year diversification is essential. By committing capital across multiple vintage years (a strategy called 'laddering'), investors smooth out the impact of market timing and create a more predictable return and cash flow profile. Most institutional investors target consistent annual commitments rather than trying to time the market.
Our database tracks vintage year data across 8,800+ fund commitments from pension allocators. This allows us to calculate vintage-year specific benchmarks for IRR, TVPI, DPI, and other metrics. The data shows that vintage year explains a significant portion of return variation, but manager selection within each vintage year remains the most important driver of outcomes.
Vintage year analysis is also valuable for secondary market pricing. Older vintage funds with known portfolios and shorter remaining life trade differently than younger vintage funds with significant unrealized value. Understanding vintage-year specific dynamics is essential for secondary market participants and GP-led continuation vehicle evaluation.