Vintage Year

Vintage year is the year in which a fund makes its first investments. It serves as a reference point for comparing the performance of different funds. Funds of the same vintage started under similar market conditions. The reason for this reference is simple: a fund's return depends substantially on the valuation levels at which it bought and sold, and both are shaped by the economic and capital market cycle.

A fund that invested shortly before a downturn contends with high entry prices and a difficult environment, while one that could invest immediately afterwards bought cheaply and sold into a recovery. Comparing funds from different vintages therefore says little about a manager's quality. Only placing a fund within its own vintage, usually through quartile rankings from benchmark databases, is informative. A practical consequence for portfolio construction follows for investors: because the best entry point cannot be predicted, a programme is deliberately spread across several consecutive vintages, which also balances capital calls against distributions.

Data providers such as Preqin and PitchBook publish such figures alongside the industry associations, though the surveys rest on voluntary reporting and may therefore be biased towards successful funds. A fund is usually assigned to its vintage by the year of the first capital call or the first investment, though this assignment can differ between data providers.