Date of Award


Document Type

Honors Thesis

Degree Name

Bachelor of Science



Advisor/Committee Chair

David M. Smith


In this paper, the performance of active equity funds that incorporate venture capital (VC) as part of their investment strategy is measured to gain insight into the value of VC use. Previous evidence suggests that VC investing requires a specialized skill set. PSN Enterprise data from 2000 to 2022 are analyzed to determine whether a sample of 24 active equity funds with VC investments obtain higher returns than non-VC funds despite their lack of experience in originating VC investments. Funds with VC investments are matched to corresponding funds without VC investments that are from the same asset class, have similar assets under management (AUM), and use the same performance benchmark. The results indicate that funds incorporating VC underperform across all tests. The results support the notion that using VC investments is not an automatic means of achieving higher returns, and that the successful use of VC requires specialized expertise.