Measure for Measure

Myth #1: The IRR is a good measure of Private Equity Returns

The IRR is the standard measure. No one ever said it was a good measure.

Myth #2: Private Equity is easy to measure.

The calculation of the IRR is fraught with problems. See Measuring Private Equity: The IRR.

Truth #1: Benchmarking is a powerful analytical add-on module to private i.

Our clients are using it and saving enormous amounts of time.

It Uses Your Data

One of the main advantages of the private i Benchmarks Module is that it works directly off your private i data. Just create or choose an index and from within private i, you can calculate an IRR for any commitment as if it were invested in that index. You can use the Benchmark IRR to
compare performance to any index you want or dream up. You can model the performance of a portfolio of investments as if they were invested
in a benchmark index.

With this tool, you can easily answer:

1. How would your money have fared if it were invested in an index fund that tracks the S&P?
2. How does your performance compare with vintage year benchmark returns from Venture Economics?
3. Does your portfolio outperform the S&P by 300 basis points?
4. What is the performance of your 1999 Buy Out funds compared to Venture?
5. ...

Caveat Emptor!

private i Benchmarks helps you answer questions, but it does not pose the questions. You must do that. This is an exact science with a very subjective basis: Make wrong assumptions and you will get precise numbers that may make no sense. It is up to you to take a sensible approach
to comparing fund performance. If you don't believe that the latest two years have significant data, or that that data can skew the result, you should omit these funds from your analysis. If you do not believe that you should commingle Real Estate and Direct Investments, then don't. As well, this process is very computational intensive, and so you can easily spend a lot of time waiting for results to ambiguous questions. Be clear
on your assumptions and the results may surprise you, but should not befuddle you.

Give it a Try!

To give it a try, contact inquiry»burgiss, and we'll enable a trial within private i. This is an area of great interest to us and we are continually
adding new functionality as per our client's requests. We'd love to hear your thoughts.