Glossary · Fund life

What is a vintage year?

A fund’s vintage year is usually the year it first called capital or made its first investment. Funds are compared with others from the same vintage.

In practice

Vintage is used in benchmarking and in LP portfolio reporting, where commitments are grouped by year to spread exposure across market cycles. Definitions vary: some data providers use the first close, the first capital call or the first investment, so the same fund can carry different vintages in different databases. It is not the fund’s formation date or its closing year.

An example

Round numbers, not a real fund

Say two funds both started in 2019. Their returns are compared with each other and with other 2019 funds, not with a fund that began after a market crash.

Why it matters

Funds that invested in the same market conditions are the fair comparison, so vintage shapes how a fund is ranked.

A definition, not advice; where usage varies the entry says so. Something wrong? Tell the desk.

Related terms

J-curveThe J-curve is the usual pattern where a fund’s reported returns dip below zero in its early years, because of fees and costs before investments mature, and then climb.
IRRIRR, internal rate of return, is the yearly return that accounts for when money goes into and comes out of a fund, so earlier payouts raise it.
TVPITVPI, total value to paid-in capital, adds the cash a fund has already returned to the value it still holds, then divides by the money investors paid in.
DPIDPI, distributions to paid-in capital, divides the cash a fund has returned to investors by the cash they paid in. A DPI of 1.0x means they have their money back.
First closeA first close is the first time a fund accepts investors’ commitments and gets going, even though it keeps raising money toward its full target.

The terms, in the news each morning.

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