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Private equity notes and comments

Private Equity Returns

Tracking private equity fund returns is probably one of the toughest elements to research within private equity (Preqin has essentially built their business on return data).

Given most funds typically invest, monitor, and harvest their investment portfolio interests over a period of 10 years or so, firms fear that premature return analysis can be highly misleading to investors.  While this is certainly possible, it’s also safe to assume that even if a firm has liquidated and closed a fund, firms would still be less than forthcoming with return info.

However, with FOIA requests and general public pressure forcing public pension LPs to be more open with their alternative investments, obtaining return info is getting easier.

This is certainly the case with CalPERS.  Not only is CalPERS one of the largest pension managers out there, it’s also one of the most transparent.

CalPERS’ website notes that it has committed close to $50 billion in alternative assets. Given the size and the pension’s current practice of publicly disclosing fund positions and returns (figures which are calculated quarterly), CalPERS provides some amazing insight into both large and small funds alike. CalPERS even consolidates return info by vintage year for further analysis.

While most public pension systems haven’t adopted CalPERS’ stance on openness, no doubt many have taken notice.

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December 22, 2010 | - By