Home Investing Strategy Portfolio Strategy The Tyranny Of IRR: A Reality Check On Private Market Returns Nov. 13, 2024 2:15 AM ET CFA Institute Contributors 5.45KFollowers ...

Additionally, IRR assumes that any cash flows are reinvested and earn a rate of return equal to the IRR. Using the example above, IRR assumes that the $600,000 cash flow from Fund B in Year 3 can ...

The report cites an average internal rate of return (IRR) of 35.1% in 2023 and 35.3% in 2022. The return on investment (ROI) for investors averaged 4.5 times.

Earlier-than-anticipated distributions from successful exits in private equity can substantially boost the internal rate of return on invested capital. Conversely, delayed distributions might ...

(In private equity, IRR’s higher than 20% are considered good.) Insights 11 th flagship, which collected $9.5 billion in April 2020 and made 114 deals, is reporting much stronger returns.