1、QUANT RESEARCHDoes VC Improve Portfolio Outcomes or Complicate Them?An Allocator Solutions report assessing ventures performance and implications for portfoliosQ12026Q1 2026 ALLOCATOR SOLUTIONS:DOES VC IMPROVE PORTFOLIO OUTCOMES OR COMPLICATE THEM?2ContentsInstitutional Research GroupKaidi Gao Senio

2、r Research Analyst,Venture Capital Nathan Schwartz,CFA Senior Quantitative Research Analyst Published on January 13,2026 Key takeaways 3Introduction 4Assessing historical VC performance 5Drivers of VC risk and return 8VCs contribution to portfolio-level outcomes 13VCs role in portfolio construction

3、16Q1 2026 ALLOCATOR SOLUTIONS:DOES VC IMPROVE PORTFOLIO OUTCOMES OR COMPLICATE THEM?3Key takeaways VC as an asset class has delivered mid-tier returns within private markets rather than persistent outperformance.Over the long run,aggregate VC returns have broadly aligned with private capital benchma

4、rks,with periods of strong relative performance concentrated around favorable macroeconomic and exit cycles.Diversification benefits from VC are more limited than commonly perceived.VCs correlation with public equitiesparticularly growth-oriented benchmarkshas remained elevated in recent years,refle

5、cting shared exposure to macro conditions and IPO markets,which constrains its effectiveness as a diversifier in equity-heavy portfolios.Reported VC returns materially understate volatility.After adjusting for appraisal-based effects,VC exhibits the highest estimated volatility across public and pri

6、vate asset classes we analyzed,underscoring that allocators may be assuming substantially more risk than headline returns suggest.Liquidity dynamics remain a structural challenge for allocations.VC distributions are persistently lower and more volatile than those of other private market strategies,d