Analyses of private market performance tend to focus on how the GP generates returns—and understandably so. But the treatment of uncalled capital is also critical when evaluating the total return of a private market allocation, which is what truly matters to investors.
Last year, Warren Buffett criticized corners of the private equity industry for overlooking this fact: "We have seen a number of proposals from private equity funds where the returns are really not calculated in a manner that I would regard as honest," the iconic investor said. "It makes their return look better if you sit there for a long time in Treasury bills. It's not as good as it looks."
For even the most sophisticated investors, properly timing capital outflows can be a challenge. So our analysts have developed new commitment pacing and cash flow models to help investors better manage their private market allocation.