medium · Private Equity pe-core
An LP is calculating the Kaplan-Schoar Public Market Equivalent (PME) for a fund. The sum of discounted distributions is 1,200M and the sum of discounted contributions is 1,000M (all discounted by the public index returns).
What does the resulting PME of 1.20 indicate?
- The fund returned 20% of paid-in capital
- The PE fund outperformed the public index by 20%
- The fund achieved a 1.20x MoIC on total invested capital
- The fund's net IRR to limited partners equals roughly 12%
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