Keeping Score, Fast and Slow (Hint: It’s Not Just About the Game of Golf)

Most of the times ideas come up from unusual sources, often unexpectedly mixed. This is what has happened with this post, in which I am writing about how score keeping in the game of golf and decision making psychology can provide insights about the valuation of investment performance. Continue reading

Yale and the Wolf, a Venture Capital Performance Tale

Every year, the press coverage about the release of the annual financial reports of one of the most prestigious investment offices in the world, often referred as the benchmark for long term investing, reminds me of a classical tale. And it’s not the first time I write about it, but reiteration deserves an encore. Continue reading

Can I Teach Your Money the Duration Trick?

Even the most sophisticated among us, when a magic trick is performed well, can’t resist its fascination. Let’s admit that. As small kids we thought there was some special power in the hands of the magician. Growing up, we all know that is an illusion, misdirectional cheating. But we keep asking HOW it’s done. Continue reading

A Challenging Validation, “a contrario”

Over the past two weeks, the conversation and the exchange of emails with a highly reputable and quant skilled professional in the private equity industry have posed an interesting intellectual challenge and created a very useful opportunity for testing “a contrario” the DaRC methodology and for discussing the relation between duration and time horizon. Continue reading

Pink Floyd’s Private Equity Songs

The temptation of another private equity musical license was too strong to resist – the titles of some of the most famous songs and albums of one of my favorite rock groups may seem to have been made on purpose to introduce and comment upon certain highly debated arguments in the PE industry. Continue reading

PE Duration Disambiguated (Smooth Capital)

Getting responses to questionnaires is an art and I can’t say I master it. Nevertheless, I had a few especially kind readers of my previous post who contributed their opinion (thanks!) to the embedded polls. Their results make it more interesting and “independent” to define “surprising” certain different data available in the industry. Continue reading

The PE S-Curve, Dug Out

There are a couple of concepts that qualify a discovery – even if just stumbled upon: novelty and usefulness. With respect to private equity, the S-Curve adds the notion of decreasing marginal returns to improve the mainstream J-Curve notion, and this clears novelty. What’s left now is to dig out its usefulness. 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

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