Financial Advisor: New Yardsticks For PE Investing

Our CIO Tom Bratkovich was recently featured in Susan Mangiero’s article in Financial Advisor Magazine on performance metrics for private equity investing.

In the article, Tom highlights that specific transactions require specific metrics “We might look at income or cash yield, similar to interest on a bond, or prioritize multiples that express the earnings power of how much we invest.” He also notes that “IRR tends to distort returns in the short run, but the multiple on invested capital is less useful with long holding periods since it does not reflect the cost of illiquidity to the investor.”

He also emphasizes asking PE managers about third-party valuations and after-tax numbers, details that often make the difference in actual investor returns.

https://www.fa-mag.com/news/new-yardsticks-for-pe-investing-85717.html