This case examines performance evaluation in private equity (PE). Its chief goal is to familiarize pupils with the current guidelines regarding the performance metrics used to evaluate PE functionality and also disclosure practices in PE. The setting for the case is a $50 million investment in a brand new $1.3 billion fund (Fund III) being raised by Rhine Capital that's under consideration by the pension trustees of Illinois Teachers' Retirement System (TRS) at an upcoming meetings in January 2013.
The State of Illinois had been for quite a while under serious financial pressure, and TRS was $52 billion underfunded relative to its future obligations. TRS decided to increase its investments in PE, to help decrease the shortfall in funds, and it's also critical that those investments earn a satisfactory return. The case discusses the difficulty of quantifying performance in PE as well as the comparative merits and shortcomings of performance metrics that are frequently used.
PUBLICATION DATE: May 12, 2014 PRODUCT #: UV6899-HCB-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
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