Think IRR is the holy grail of Private Equity performance? Think again.

Billionaires and elite LPs play by deeper rules—and now, you can too.

If you’re serious about understanding 𝐡𝐨𝐰 𝐭𝐨𝐩-𝐭𝐢𝐞𝐫 𝐟𝐮𝐧𝐝𝐬 𝐚𝐫𝐞 𝐭𝐫𝐮𝐥𝐲 𝐞𝐯𝐚𝐥𝐮𝐚𝐭𝐞𝐝, this 𝐈𝐍𝐒𝐄𝐀𝐃 𝐝𝐞𝐞𝐩-𝐝𝐢𝐯𝐞 is your new playbook. It’s the kind of toolkit the ultra-wealthy use to filter noise and see real performance behind the glossy IRR headlines.

📊 𝐌𝐞𝐚𝐬𝐮𝐫𝐢𝐧𝐠 𝐏𝐫𝐢𝐯𝐚𝐭𝐞 𝐄𝐪𝐮𝐢𝐭𝐲 𝐅𝐮𝐧𝐝 𝐏𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞: 𝐁𝐞𝐲𝐨𝐧𝐝 𝐭𝐡𝐞 𝐁𝐚𝐬𝐢𝐜𝐬

Here’s what most investors miss (but billionaires don’t):

1️⃣ 𝐈𝐑𝐑 ≠ 𝐑𝐞𝐚𝐥𝐢𝐭𝐲 𝐂𝐡𝐞𝐜𝐤

→ It’s time-sensitive and flawed. A few early exits can spike IRR artificially.

→ It also assumes you can reinvest at that high return—rarely the case.

2️⃣ 𝐌𝐈𝐑𝐑 𝐭𝐨 𝐭𝐡𝐞 𝐑𝐞𝐬𝐜𝐮𝐞
→ Modified IRR adjusts for actual reinvestment rates and capital costs.
→ It’s a more realistic view across the full life of a fund.

3️⃣ 𝐌𝐈𝐑𝐑 𝐭𝐨 𝐭𝐡𝐞 𝐑𝐞𝐬𝐜𝐮𝐞
→ 𝐓𝐕𝐏𝐈 shows total value, but it’s powered by:

𝐃𝐏𝐈 (𝐃𝐢𝐬𝐭𝐫𝐢𝐛𝐮𝐭𝐞𝐝) : What’s cashed out.

𝐑𝐕𝐏𝐈 (𝐑𝐞𝐬𝐢𝐝𝐮𝐚𝐥) : What’s left on the table.

→ 𝐆𝐫𝐞𝐚𝐭 𝐋𝐏𝐬 track how this mix evolves, not just the headline.


4️⃣ 𝐏𝐌𝐄 & 𝐃𝐢𝐫𝐞𝐜𝐭 𝐀𝐥𝐩𝐡𝐚

→ PME (and PME+, KS PME) benchmark your fund vs. public markets.

→ Direct Alpha isolates the true outperformance—your real edge.

𝐖𝐡𝐲 𝐝𝐨𝐞𝐬 𝐭𝐡𝐢𝐬 𝐦𝐚𝐭𝐭𝐞𝐫?
Because 𝐛𝐢𝐥𝐥𝐢𝐨𝐧𝐚𝐢𝐫𝐞 𝐢𝐧𝐯𝐞𝐬𝐭𝐨𝐫𝐬 𝐝𝐨𝐧’𝐭 𝐜𝐡𝐚𝐬𝐞 𝐬𝐡𝐢𝐧𝐲 𝐈𝐑𝐑𝐬—𝐭𝐡𝐞𝐲 𝐝𝐞𝐜𝐨𝐝𝐞 𝐭𝐡𝐞 𝐝𝐚𝐭𝐚.
𝐓𝐡𝐞𝐲 𝐰𝐚𝐧𝐭 𝐜𝐨𝐧𝐭𝐫𝐨𝐥, 𝐩𝐫𝐞𝐝𝐢𝐜𝐭𝐚𝐛𝐢𝐥𝐢𝐭𝐲, 𝐚𝐧𝐝 𝐬𝐭𝐫𝐚𝐭𝐞𝐠𝐢𝐜 𝐮𝐩𝐬𝐢𝐝𝐞.

𝐏𝐫𝐢𝐯𝐚𝐭𝐞 𝐞𝐪𝐮𝐢𝐭𝐲 𝐢𝐬 𝐭𝐡𝐞𝐢𝐫 𝐩𝐥𝐚𝐲𝐠𝐫𝐨𝐮𝐧𝐝—𝐛𝐮𝐭 𝐰𝐢𝐭𝐡 𝐩𝐫𝐞𝐜𝐢𝐬𝐢𝐨𝐧 𝐭𝐨𝐨𝐥𝐬.

This post pairs perfectly with
👉 𝐓𝐡𝐞 𝐁𝐢𝐥𝐥𝐢𝐨𝐧𝐚𝐢𝐫𝐞 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐁𝐥𝐮𝐞𝐩𝐫𝐢𝐧𝐭
If you haven’t read it yet, you can found it on the comment below, to level up your mindset.

♻️ Repost to help your network build real 𝐋𝐏 fluency
💬 Tag a 𝐆𝐏 𝐨𝐫 𝐋𝐏 who should read this today

Follow Mohamed Amine Khiari 🚀For daily clarity on VCs, LP strategy, PE metrics, and smart capital.

Credit INSEAD
hashtag#PrivateEquity hashtag#FundPerformance hashtag#IRR hashtag#MIRR hashtag#TVPI hashtag#DPI hashtag#RVPI hashtag#PME hashtag#DirectAlpha hashtag#VCStrategy hashtag#BillionaireBlueprint hashtag#FundMetrics hashtag#LPInsights hashtag#INSEAD hashtag#MohamedAmineKhiari hashtag#AlternativeInvestments hashtag#FamilyOfficeWisdom hashtag#WealthBuilding