Scientific Infra & Private Assets is pleased to present an approach using privateMetrics® data to measure and track the alpha of private market funds, allowing robust and representative fund selection and monitoring.

infraMetrics® & privateMetrics® provide access to hundreds of benchmarks across the infrastructure and private equity asset classes, enabling investors to create the most representative benchmark for the fund they invest in.

Direct alpha can allow you to assess the performance of each fund and manager fairly against a representative benchmark and determine which manager is over/under-performing the market, or simply to monitor the alpha-generating capability of a fund on an ongoing basis.

In this example, while both funds appear to have outperformed public markets, only Fund 2 has been able to generate alpha against the representative private market benchmark.

• Fund 1 has delivered an IRR of 17.64% but underperformed the market with an alpha of -0.61%. Fund allocation resulted in small positive alpha but was offset by underperforming investments.
• Fund 2 has delivered an IRR of 21.37% and outperformed with an alpha of 4.81%. Primarily driven by superior investment selection by the manager.

This approach will be discussed in detail during a dedicated session at our EDHEC Private Assets Day conference to be held on 11 December, 2024 in New York.

Further information about our Private Market Indices is available here.