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

Carlyle, Blackstone and Private Markets’ Beta

In the last few days, Carlyle first and Blackstone almost right after released investor updates and provided interesting information about the growth estimates of the value of their private equity funds for 2013 and the first quarter of 2014. Continue reading

No Liquidity without Price

The title of last week’s PEI‘s Friday Letter, “No Dice without Liquidity”, identifies the critical element determining the reported decision of KKR to stop promoting two retail products. Continue reading

Riding Private Markets’ S-Curves

As I write about interpreting and predicting private markets’ returns, for the readers who missed one of my previous posts, I confirm there is no misspelling in the headline, it’s an S. Continue reading

Fair Value, DaRC Transparency

A recent article from the Private Equity Manager’s Daily Digest titled “When is fair value not fair value?” provides interesting and sharable comments about the decision taken by the American Institute of CPAs (AICPA) to create a task force and deliver more granular rules for “valuing hard-to-price non-quoted companies”. Continue reading

Volatility Inhibits PME’s Meaningfulness

A recent post that summarises most of the history of the post-IRR performance calculation and valuation methodologies for the private capital industry has been written by Mr. Jesse Reyes, widely regarded as one of the leading experts of the field. Continue reading