Private fund managers often justify their fees by pointing to their track records and claiming that by investing in private companies they are delivering superior returns that are uncorrelated to public markets. But according to research from Vanguard using data from 1980 through 2012, only the top quartile of private equity returns have materially outperformed public markets.
Public market equivalent (PME) analysis gives context to a fund manager’s performance by comparing it against a public market index. It provides a more measurable, continuous benchmark compared to blind pool peer performance datasets.
