The PE S-Curve, Stumbled Upon

Unexpectedly last week, I stumbled upon an S-Curve hidden between the lines of a study released by an established private equity funds of funds firm with a cautious introductory question: “do private equity funds sometimes just run out of steam?Continue reading

Calpers, SEC and the Hawthorne Effect on PE

This morning a “must read” Pulse email caught my eye before my finger could enter the “default mode” and hit the delete key on my phone. The word science, spotted in the title, won my curiosity, sneaking in through my Galilean inclination. Continue reading

IRR Is Like Fish

IRR is like fish, when someone gets hold of it, it slips away. Hard to seize, hard to terminate – with incredible survival instinct, it tries to jump out of any bucket where it has been secluded. Continue reading

Is Benchmarking IRRs against an IRR Benchmark an Apples for Apples Comparison?

This question, posed in a recent comment to my Fooled by IRRs post, deserves an answer in the form of a post. It has made me realize that the inaugural post of my blog, The Quartiles’ Oxymoron, was not as self-explanatory as I thought it was. Continue reading

IRR Alpha Looks Bigger [More Subtly Fooled #1]

When a standard of measurement of returns allows close to 70% of investment managers (GPs) to claim their funds are first quartile performers (i.e. ranked in the top 25%) (1) – such as the case of the IRR – something is obviously wrong. Continue reading

Fooled by IRRs (Yale, Schwarzman’s Cases)

“Everyone loves an optical illusion, except when it comes to financial results (1)”. Yet the private markets are not immune from optical illusion risks. Continue reading

Introducing the [α + β-Cen] Reports

I am pleased to introduce first issue (number 0 in beta) of the [α + β-Cen] Reports whose objective is to provide “rational and quantitative” valuation indications and forecasting references to private markets’ fund investors. Continue reading

Why IRR, PME Induce Inaccurate Allocation Decisions

In one of my previous posts, I wrote about the importance of time – of correctly framing time – for purposes of comparability and pricing. The topic is so critical not to require a second round that adds more details and practical implications. Continue reading

Relativity Theory, Money-Time Curvature and Private Capital Pricing

Wonder what relativity theory and money-time curvature have to do with rational pricing of private capital? The two quotes below, freely adapted from the Wikipedia pages about space-time and reference frame, may give a hint. Continue reading