- LP Corner: Private Equity Fund Performance – An Overview - This blog post.
- LP Corner: Fund Performance Metrics – Multiples TVPI, DPI and RVPI
- LP Corner: Fund Performance Metrics – Internal Rate of Return (IRR) – Part One
- LP Corner: Fund Performance Metrics – Internal Rate of Return (IRR) – Part Two
- LP Corner: Fund Performance Metrics – Public Market Equivalent (PME)
- LP Corner: Fund Performance Metrics - Private Equity Fund Performance
- LP Corner: Gross vs Net Returns
Introduction
How do LPs measure performance of a private equity fund? It’s not a simple as one would think. This post introduces a number of concepts, each of which will be discussed in more detail in future posts.
The following are the basic metrics used to evaluate fund performance:
- Rate of return. This is also called internal rate of return, or IRR.
- Multiples. These multiples include Total Value to Paid-in-Capital, Distributions to Paid-in-Capital, and Residual Value to Paid-in-Capital.
- Relative performance. This is performance relative to comparable funds (also called quartile performance).
- Public market equivalent performance. This is known as PME, and has a number of variants.
Each of the above performance metrics have positives and negatives.
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