Private Equity Performance Continues to Reflect Tough Market Conditions
One-Year Returns Improved Slightly in Q4 2001, but signs of recovery remain scarce

June 10, 2002 -- New York, NY - Private equity performance results for Q4 2001 showed a slight increase over the previous quarter, reversing the downward trend seen for the last four quarters, according to Thomson Venture Economics and the National Venture Capital Association (NVCA). The increase in the one-year venture return from 32.4% at the end of Q3 2001 to &Mac246;27.8% at year-end 2001 is similar to what NASDAQ experienced during the same time period. Nevertheless, the five-year and 10-year return figures, 35.9% and 26.4% respectively, remain at robust levels and exceed similar metrics for the public markets.

"The downward trend in venture capital performance numbers seen in recent quarters is an inevitable result as industry performance returns from the triple-digit returns seen during the last boom period back to sustainable levels that are more in line with historical averages," explained John Taylor, NVCA&Mac226;s Vice President of Research. "It may be some time until we see signs of recovery in the performance figures. Once the economy improves and technology spending begins to increase, it will take at least several quarters, if not several years, for private venture-backed companies to mature to the point when they are ready for an IPO or to be acquired by a larger entity."

Investment Horizon Performance as of 12/31/2001
Fund Type	Early/Seed VC	Balanced VC	Later Stage VC	All Venture	All Buyouts	Mezzanine	Buyouts and Other PE	All Private Equity
1 Yr	-33.9	-24.3	-20.0	-27.8	-14.5	-2.2	-13.4	-18.5
3 Yr	77.4	43.5	22.5	49.3	0.5	7.5	1.0	13.2
5 Yr	49.4	32.8	21.1	35.9	5.0	9.2	5.2	14.8
10 Yr	32.1	22.7	24.2	26.4	10.8	11.5	10.9	17.3
20 Yr	21.1	15.5	16.9	17.7	14.4	11.0	13.9	16.2
Source: Thomson Financial Venture Economics / National Venture Capital Association

Venture Economics&Mac226; Private Equity Performance Index is calculated quarterly from Venture Economics&Mac226; Private Equity Performance Database (PEPD). The PEPD tracks the performance of 1400 US venture capital and buyout funds formed since 1969. These statistics are calculated net to investors (net of fees and carried interest) using both cash on cash returns (distributions and capital calls) and the unrealized net asset value of funds as reported by private equity fund managers. For further information on how these returns are calculated please visit the methodology section of our website (http://www.ventureeconomics.com/vec/methodology.html).

Although recovery is on the long-term horizon, at present the youngest funds are still struggling amid a weak economy and limited liquidity options. It may be several years before we see these young funds realize their current investments.

Venture Economics, a Thomson Financial company, is the foremost information provider for equity professionals worldwide. Venture Economics offers an unparalleled range of products from directories to conferences, journals, newsletters, research reports, and the Venture Expert&Mac250; database. For over 40 years, Venture Economics has been tracking the venture capital and buyouts industry. Since 1961, it has been a recognized source for comprehensive analysis of investment activity and performance of the private equity industry. Venture Economics maintains long-standing relationships within the private equity investment community, in-depth industry knowledge, and proprietary research techniques. Private equity managers and institutional investors alike consider Venture Economics information to be the industry standard. For more information about Venture Economics, please visit www.ventureeconomics.com.

Venture Economics&Mac226; Private Equity Performance Database provides an array of benchmarks ranging from individual vintage year benchmarks, industry returns, cashflow and overhang analysis, all of which are available on our VentureXpert web product. In addition to the web product, Venture Economics offers various books and reference guides under our Investment Benchmark Report series. For further inquiries, please contact Neil Goldstein at (415) 732- 6293 or via email at neil.goldstein@tfn.com.

The National Venture Capital Association (NVCA) represents over 450 venture capital and private equity organizations. NVCA's mission is to foster the understanding of the importance of venture capital to the vitality of the U.S. and global economies, to stimulate the flow of equity capital to emerging growth companies by representing the public policy interests of the venture capital and private equity communities at all levels of government, to maintain high professional standards, facilitate networking opportunities and to provide research data and professional development for its members.