Gottschalg, Oliver and Phalippou, Ludovic (2007) The Truth About Private Equity Performance. Harvard Business Review, 85 (12). pp. 17-20.
The article reports that calculating the performance of private equity funds with a modified internal rate of return (M-IRR) results in a more accurate performance yield or true return. The problem with the internal rate of return (IRR) method is that IRR overstates the fund's performance and misrepresents its relative ranking, which misleads investors about the reinvestment of cash proceeds and makes it difficult to compare fund managers. An example is given showing how M-IRR better represents the rate of return for private equity funds.
|Keywords:||private equity; investment|
|Centre:||Faculty of Finance|
|Date Deposited:||01 Aug 2012 13:23|
|Last Modified:||23 Oct 2015 14:07|
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