Private Equity Glossary

Dollar-weighted (returns)

A misleading term when compared with time-weighted returns.

Simply the calculation of the IRR of a series of fund cashflows, i.e., the compound return over time. THis is the classic measure of private equity returns, and is to be comended.

Great care should be taken not to confuse this measure with time-weighted returns which, contrary to first impressions, actually means something completely different (and should be avoided at al costs).

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