The Inverse Correlation Between Venture and Public Markets

Many investors are analyzing how the recent volatility may impact both their public and private holdings. When comparing the S&P 500's performance over the past 32 years with the Cambridge Associates’ median venture capital returns over the same period, you will find an inverse correlation between the two of 28%, implying that as the public markets increase, venture returns for those vintage years decrease. Ultimately, market volatility and the correlated lowering of public valuations can create opportunities for the venture partners.