Could someone clarify what exactly vintage is? (PE)

From most definitions online, you can find that it means the moment a PE fund does its first investment. These definitions are vague and I have yet to find a formal/legal one. My confusion is whether it really means that, because we know that most funds use subscription call facilities to fund the equity of the acquired companies. So could someone clarify, does vintage mean the year when a fund does the first investment, or is it when a fund does the first call of the undrawn commitments? Thank you.

Comments (4)

  • Associate 2 in PE - LBOs
Jan 20, 2022 - 3:29pm

I will let someone else correct me if wrong, but I believe it would be based on the time of the first investment (unrelated to the fund revolver dynamic you mention). The reason being is vintage is more tied to valuation environment and associating the returns profile across funds on an apples-to-apples basis

Most Helpful
Jan 20, 2022 - 4:25pm
franco, what's your opinion? Comment below:

One use of of vintage is for LPs to compare the performance of a PE fund versus other PE funds with a similar strategy that was deploying capital at the same time.

Agree that convention is first investment, but will be driven by the data provider (eg prequin classification for vintage) and how the GP classifies themselves. On the latter, it is common for GPs to pick the most favorable interpretation (eg year first close, year final close, first investment, first capital call).

So if you are on the LP side it is worth clarifying how the GP has picked vintage year and checking peer group performance year -1, +1.

  • Analyst 1 in IB - Cov
Jan 20, 2022 - 5:16pm

Great, thanks for the insight

Jan 20, 2022 - 7:44pm
spawn, what's your opinion? Comment below:

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