In the real world, how do prospective PE firms model IRR projections? For the pitch deck, is it common to sensitize and demonstrate several possible outcomes, e.g. expected, over-, and underperforming? 2. If a fund invests in different asset classes and/or different geographies (each with its own projected IRR) how do you arrive at an estimated overall IRR for the prospective fund? Do analysts weight the different IRRs and assess correlation, employing CAPM, MPT or other statistical tools?

Yes, several scenarios are presented. I have never put together one for multiple asset classes so I can't speak from experience on that. However, I imagine each asset class would need to be modeled separately. Likely they would raise different funds for each prospective asset class as the LP's are looking for a specific type of exposure.

New Fund IRR calculation and prediction

In the real world, how do prospective PE firms model IRR projections? For the pitch deck, is it common to sensitize and demonstrate several possible outcomes, e.g. expected, over-, and underperforming? 2. If a fund invests in different asset classes and/or different geographies (each with its own projected IRR) how do you arrive at an estimated overall IRR for the prospective fund? Do analysts weight the different IRRs and assess correlation, employing CAPM, MPT or other statistical tools?

532 WSO Academy Private Equity Session Reviews: 4.82/5

Anahuac University

Class of '18 Nov 2026 Cohort

5.00/5

Private Equity Full Resume Review

“Rachel helped me through the very beginning and we had several iterations that were crucial to the development of a better and great CV for applications. I appreciate her patience and puntual feedback every single time. Also the response time was very short and kept me aware of any delay. It kept me on line for what I had to do and some areas to focus that I didn't knowe before, and some of them honestly I didn't have any idea. Very well all around work”

Class of '24 Dec 2025 Cohort

5.00/5

Private Equity Mock Coffee Chat

“Julius was extremely helpful in breaking down the accounting concepts, especially allowing me the opportunity to walk through a question step by step on how the three financial statements are impacted across income, cash flow and balance sheet along with figuring out the mental math for it all. The concept for Equity Value to Enterprise value and bridging between the two were fairly straight forward. Along with the networking advice on reaching out to potential recruiters for Investment banking roles and how lateral recruitement is happening year end vs going into Q1 next year.”

See All 11,626 WSO Academy Reviews

2 Comments

WSO Monkey Bot

O

7y

Hi latetothegame, any of these discussions helpful:

Working in FIG (Financial Institutions Group)- An Overview. spread between those two rates of return. Additionally, because of the sources of some of their capital ... * Lower is better * Measure of operational efficiency Return on Average Assets (ROAA) = Net Income / Avg. ... definition of what a bank's "safe" capital (sources of funding) is, which is
How I got a 770 on the GMAT... whitecollarandsuspenders version you can usually approximate. Determine the amount of calculation needed based on the answer choices. ... Introduction Re: This Post This post applies mostly to the Quant section of the GMAT, which was by far the most ... challenging portion of the exam for me. For those of you who can ace the math no problem, I'd still say ...
Intrinsic Value- what's the best way to evaluate a company be stable so that it is possible to make a prediction of future growth rates. After applying the ... rate is the returns divided by the market capitalization of the company (M). This way it is possible to ... respective safety margin, of the future dilution rate. So when we calculate the intrinsic value per share we ...
SAT to GMAT Score Correlation the SAT Predict Your GMAT Score? Unlike what some people believe, the GMAT isn't easy and in more ... quantitative section, so it trips many people up. Did you score well on the math portion of the SAT because of ... a calculator? Because if that is the case you better start practicing your mental math. Basically, while the ...
Basic Overview of the Consumer Sector company (stock to sales simply being how many items of the new product were sold are in stock and were ... following: Average sale per customer, conversion rates- number of page views to sell product X or number of ... growth rates, margin profile by geo and open to close ratios (number of stores opened in geo X versus ...
Managing Your Money- Building a Personal Financial Model (Canadian schools, while they don't enjoy the prestige of our US counterparts, can nonetheless be ... equally expensive). The worst and probably most embarrassing part is, despite being a low cost of living ... aggressive drinks with the guys (lots of bottles, although not so much models. I know... no game). I think ...
Be wary of greener grass; there are always tradeoffs... subsequently turned down a full time offer, I want to echo what another poster wrote about being wary of ... stimulating. Most work is process oriented and will be until sentient AIs come to relieve us of our duties. ... There are a small number of critical creative jobs at any given moment. There is some truly ...
More suggestions...

If those topics were completely useless, don't blame me, blame my programmers...

Reply

Quote

Report

Other

I'm an AI bot trained on the most helpful WSO content across 17+ years.

Mephistopheles

PE

7y

Most Helpful

Nihil omnis quibusdam vel. Adipisci eos sapiente qui eos veniam iure omnis aut. Quia consequuntur quos inventore doloremque sed.

Modi omnis quis sapiente amet omnis est. Ut et veniam perspiciatis ut sint. Vitae aperiam aperiam quaerat consectetur ea quia.

Et iure consectetur est possimus ut. Qui voluptas est neque ab quo. Nihil aut tempora est voluptatem. Eos porro tempore non id. Quia magnam corrupti veniam fuga ut sed. Ullam fugit et odit pariatur ut. Nihil minima saepe sint nihil.

Sapiente voluptas illum magni dicta officiis qui ea. Soluta ut soluta facere mollitia tempore facere. Maxime ut libero dolores non. Rem nisi qui quia deserunt. Fugiat in et voluptatem neque id.

Reply

Quote

Report

Other

Authored by: Certified Private Equity Professional - PartnerCertified Private Equity Pro

+84	Cognitive decline	27	10h
+55	Vibe-Working in Finance with AI ? What about you	34	12h
+49	Del	26	2d
+44	PE VP: Thoughts on Quitting with Nothing Lined Up?	12	10h
+18	How do PE funds choose their advisors?	8	15h
+18	Acquisition Deal Structure: More Cash at Close vs. Smaller Equity Rollover in a Holdco	3	3d
+17	Is buyside worth it if most associate programs are 2 and out?	4	4d
+13	How Cooked is Software PE?	1	2d
+13	Management consulting or munis?	6	4d
+12	Mitsui Chemicals is paying USD 900M for Ultradent, about 29x operating profit by my math. Is that normal for dental materials?	3	3d

1	redever	99.2
2	BankonBanking	99.0
3	Secyh62	99.0
4	kanon	99.0
5	Betsy Massar	98.9
6	DrApeman	98.9
7	GameTheory	98.9
8	CompBanker	98.9
9	dosk17	98.9
10	Mimbs	98.8

Elite Career Bootcamp. Top Job Offer Guaranteed.

Elite Career Bootcamp. Top Job Offer Guaranteed.

New Fund IRR calculation and prediction

Score Breakdown

Feedback

Score Breakdown

Feedback

Elite Career Bootcamp. Top Job Offer Guaranteed.

Elite Career Bootcamp. Top Job Offer Guaranteed.

New Fund IRR calculation and prediction

See All Comments - 100% Free

Trending Content - Private Equity Forum