Fund Structure
Vintage Year
Vintage Year
The year in which a fund makes its first investment or begins its investment period.
Vintage year refers to the year when a private equity fund begins making investments. It's a critical classification used for benchmarking because market conditions vary significantly across different time periods.
Why vintage year matters
- Funds that invested during market peaks may face different valuations
- Economic cycles affect entry prices and exit opportunities
- Performance should be compared within the same vintage cohort
Common practices
- Some define vintage as the year of first capital call
- Others use the year of first investment
- Industry databases may use slightly different definitions
Benchmarking implications
- A 2020 vintage fund that invested during COVID-related market disruption will have different performance characteristics than a 2019 fund that invested at pre-pandemic valuations.
Example
A fund that held its final close in December 2019 and made its first investment in March 2020 is typically classified as a 2020 vintage fund.