# Private Equity Fund Return (IRR)

Can anyone guide me that how to calculate IRR for Private Equity Fund. I have the following data.

• Capital Call with dates
• Management Fees with dates

I used excel formula of XIRR, but I found that excel need one positive number that could be Distribution or unrealized fair value.

During my search, I found a document stating that all your capital call and management fee should be negative and Distribution or unrealized fair value should be position. Unfortunately, I don't have Distribution or unrealized fair value at this stage.

kindly suggest how can I calculate return.

• If you don't have payoffs, you can't calculate a realized return. Do I not understand something? – Matthew Gunn Oct 4 '18 at 13:52
• I believe you are right because based on my searching, I found that I should have some payoff. One thing i would like to mention that its a closed end fund, so in this case there will be no distribution. Kindly suggest if there is any way to calculate return with the available information. – Arfeen Zia Oct 4 '18 at 14:06
• A similar question might be, "how do I calculate the return of Apple from today (10/4/2018) to next year (10/4/2019)?" I similarly don't have the distributions of Apple in the next year or the price at the end of next year. – Matthew Gunn Oct 4 '18 at 14:18
• But if its stock return, we can forecast the price through Monte Carlo simulation. However, for my question, I do agree with you that it's not possible to calculate return with the available information. Anyways, Thanks for your support. Appreciated.... – Arfeen Zia Oct 4 '18 at 14:22
• Perhaps a question might be, "Let $\{x_t\}$ denote a time series of cash flows. An internal rate of return $r$ sets the present value of the cash flows to zero: $0 = \sum_t \frac{1}{(1+r)^t} x_t$. What do people do when the cashflows are stochastic? Is there analogue to internal rate of return where $\{X_t\}$ is a stochastic process?" – Matthew Gunn Oct 4 '18 at 14:39