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CEO Talk (8/9) - Why Private Market Performance Can Be a Tricky Subject

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March 13th, 2023





In a recent conversation between Andreas Bezner, CEO of Stableton, and Bill Kelly, President and CEO of CAIA, the two discussed various topics driving private markets today. This eighth 2:30-minute extract revolves around the Internal Rate of Return (IRR) concept. First, Bill Kelly mentions that the concept of IRR is often misunderstood by end investors, quoting "you can't eat IRR", the famous letter to investors penned by Howard Marks of Oaktree. Our own Andreas Bezner explains that pure private market investors measure performance by IRR and distributed vs paid-in, which is not necessarily understandable for public market investors. Instead, public market investors tend to use performance indicators like performance per annum. Andreas also highlights that it's impossible to compare a secondary fund with a primary fund, as the approaches can differ vastly. Overall, the conversation highlighted the need for education and understanding regarding private markets and the use of traditional performance metrics.

To gain deeper insights into Stableton's approach to private markets secondaries, watch the complete conversation between Andreas and Bill here:

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