How private equity performance is measured, why every metric can mislead, and how experienced LPs and GPs actually read a track record. Private markets have no daily price; returns are built from irregular, manager-controlled cash flows plus a manager-estimated NAV. Every number in a PPM is therefore a choice — of metric, of benchmark, of date, of gross vs net, of whether a credit line was used. Understanding those choices is the job.
What the study covers
- 1The building blocks
- 2Gross vs net
- 3Which metric when?
- 4Public market equivalents in plain English
- 5Dispersion: why manager selection dominates
- 6Reporting standards and regulation
- 7Common pitfalls (summary; detail in PITFALLS_AND_BENCHMARKING.md)
- 8How an expert thinks about it
Technical exhibits
Worked examples, checklists and case studies included with this study.
Metrics Worked Example
11-year fund cash-flow series; IRR, TVPI, DPI, RVPI, PIC, Long-Nickels PME, Kaplan-Schoar PME, PME+, Direct Alpha — all computed and tied out by script
Subscription Lines and Gross vs Net
Numerical impact of subscription lines on IRR and MOIC; gross-to-net bridge
Pitfalls and Benchmarking
NAV staleness, interim IRR manipulation, quartile games, benchmark providers (Cambridge, MSCI-Burgiss, PitchBook, Preqin)
Persistence Dispersion and J Curve
Vintage-year dispersion, persistence research (Kaplan-Schoar 2005; Harris, Jenkinson, Kaplan & Stucke), the J-curve