Investors look beyond IRR, investment multiple

Investors trying to decide which funds to back are putting more emphasis on realized returns, and deploying new tools to understand just how much sponsors beat or fall short of public equity benchmarks, according to interviews with advisers, sponsors, academics and vendors.

The focus on distributions stems in part from the experience of investors during the financial crisis. Portfolio markdowns didn’t always keep pace with market reality in those dark days; that led many investors to lose faith in the interim valuations ...

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