I have the following data for a fund. The contributions come from the LPs (i.e., the investors invest more in the fund, or withdraw money from the fund), MV stands for market value.

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The timing is not regular (makes me think I should use XIRR) and the flows can be negative (modified IRR, generalised IRR ? ) and I have to adjust for changes in the market value (unrealised gains).

What approach/formula should I use in this instance, please?

I have been asked to calculate the internal rate of return of the fund, but the exact definition is left up to me, provided it makes sense.

(I saw these two questions:

  • $\begingroup$ Can you specify what is GP ? $\endgroup$ – whisperer Sep 10 '20 at 14:05
  • $\begingroup$ Edited, thx for this q @whisperer $\endgroup$ – hartmut Sep 10 '20 at 15:17
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    $\begingroup$ What is unclear to you? An Internal Rate of Return considers the initial investment (250), the contributions (2.6,-0.3,1) and the "final withdrawable amount" (-260). It does not consider "unrealised gains" during the intervening period. $\endgroup$ – noob2 Sep 10 '20 at 16:08
  • $\begingroup$ @noob2 Thanks for your comment. But if the IRR doesn't consider the unrealised gain, it conveys very little info for a fund that made capital losses/gains isn't it? What would be a more informative metric in this case? $\endgroup$ – hartmut Sep 10 '20 at 17:10
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    $\begingroup$ The gains/losses you made previously (if you still have them) are included in the final amount -260 (which needs to be a market value,of course). $\endgroup$ – noob2 Sep 10 '20 at 17:14

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