3

Yes, this is increasingly prevalent in the endowment/pension world. The key reasons for doing co-investments are: Lower fees: Manager fees are more of an issue for endowments/pensions than ever, particularly since long-term expected returns (and recent realized returns of external managers) have come off significantly. Co-investments are usually offered ...


2

I am not an expert on GIPS, with its many pages of rules, but I do remember that under GIPS Private Equity results are to be given in terms of IRR (Internal Rate of Return). In most other cases (stock/bond portfolios for example) GIPS requires TWR (Time Weighted Return) and forbids the use of IRR. To compute the IRR we need the dates and amounts of cash ...


2

When a limited partnership in PE (private equity) is established, each limited partner commits some amount, say x, and that caps their liability (Commitment). As the PE firm usually will make investment over time or in the future, it would not make much sense for the LPs to hand over the money to the PE firm when the partnership is formed. Instead the PE ...


1

So, if I'm reading correctly, you're fundamentally asking what the relationship between 'LN' and 'R' is. In short, it has to do with using a Taylor series to approximate period return. Recall by expansion of the Taylor series: Which, for small x gives: Which means we can approximate individual arithmetic returns using logarithms. We traditionally use ...


1

For publicly traded instruments market-based models are indeed favoured. For non-publicly traded instruments, such as leveraged finance loans to private equity owned companies, industry practice is to use fundamentals-based models. This is often most simply done by looking at a wide variety of company financials/fundamentals (and macro-economic variables if ...


1

You could calculate Z-score of a privately owned company and compare it with its publicly traded peers. Z-score is based on the financial ratios of the company and you will have to apply some sort of weighting. You can take a look at here to get a basic idea about this technique.


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