What Have You Made on Private Equity? Who Knows?!

(Bloomberg) There are lies, damned lies and statistics – and then there’s IRR. The internal rate of return metric used by private-capital managers has long had critics in finance and academia because it is easily manipulated and hard to compare with the transparent returns of, say, stocks and bonds. Still, it survives because there is no killer alternative.

Now, after a spell when private equity has struggled to sell portfolio companies due to unpredictable stock markets and a lack of high-yield debt funding, investors in such funds are increasingly looking at cash-based measures of performance. The numbers aren’t great…