TY - JOUR T1 - Private Equity Performance and the Effects of Cash-Flow Timing JF - The Journal of Portfolio Management DO - 10.3905/jpm.2022.1.395 SP - jpm.2022.1.395 AU - Stephannie Larocque AU - Sophie Shive AU - Jennifer Sustersic Stevens Y1 - 2022/07/12 UR - https://pm-research.com/content/early/2022/07/12/jpm.2022.1.395.abstract N2 - Private equity (PE) firms have discretion over the timing of their funds’ capital calls and distributions, making the popular internal rate of return (IRR) an incomplete measure of PE fund performance. Do investors avoid the textbook pitfalls of the IRR when cash-flow timing is partly endogenous? In a comprehensive sample of 6,945 funds, the authors find that more than half of the funds’ IRR is attributable to timing, with substantial variation. The timing component persists across a PE firm’s funds and facilitates fundraising. ER -