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How to Measure Private Equity
Performance
Critics of private equity investing argue that there is no widely accepted benchmark against which to measure performance. While this is true, a number of valid benchmarks and monitoring procedures do exist. These different yardsticks are intended to assess different aspects of performance, so it is important for Pension Committees and other plan fiduciaries to understand what they should measure, when, and why. Overall, we believe that a ‘balanced scorecard’ approach, including qualitative as well as quantitative measures, is the best way to assess private equity performance, particularly in the early years.
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