Three myths about the reliability, predictability, and resilience of private equity (PE) performance play a salient role in drawing investors to the asset class. To prove outperformance, however, PE returns are assessed relative to those of other asset classes. From this practice, the myth of performance comparability…

Private equity (PE) investment returns are neither reliable nor predictable. Many of my clients are prepared to accept these as facts. But one private equity myth is harder to dispel, that of the PE sector’s resilience. Unlike other asset classes, the legend goes, private equity can weather the vagaries of the economic cycle…

The internal rate of return (IRR) is not a scientific method to calculate performance. Far from it. Fund managers can manipulate, misreport, or altogether fabricate their results, making them unreliable. But a larger question for prospective investors is whether private fund managers possess unique skills that can somehow…