hard · Private Equity & LBOs
An LP is using the Kaplan-Schoar PME (KS-PME) to evaluate a fund.
If the sum of discounted distributions (using public index returns) is $220 million and the sum of discounted contributions is $200 million, what does the resulting metric indicate?
- The fund achieved a 1.1x total Multiple on Invested Capital (MoIC).
- The fund underperformed the benchmark, as the ratio is close to parity.
- The fund's internal rate of return is exactly 10%.
- The fund outperformed the public market by 10% on a cash-flow-weighted basis.
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