Deep Dive - Private Markets

Scientific Infra & Private Assets
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A Podcast about the latest data, benchmarking and indexing innovation in private investment asset classes, including private equity, infrastructure and private debt

Season 1

  1. Discover PrivateMetrics

    EPISODE 1

    Discover PrivateMetrics

    What is privateMetrics, the new SIPA product and why is it a game changer for private markets.

    31 min

  2. EPISODE 2

    Private Equity in 2024: Market Trends and Valuations

    This January 2025 report, utilizing the privateMetrics database, analyzes the 2024 private equity market, focusing on valuation multiples, investment opportunities, and sector trends. It highlights the resilience of market prices despite a slower exit environment and discusses the divergence between reported NAVs and market prices. The report details sector-specific valuation changes, noting manufacturing's growth and challenges in hospitality. Employing the PECCS® classification, it examines how revenue and customer models impact valuations and introduces the privateMetrics valuation model, which uses transaction data and various factors to estimate private company market prices and construct representative indices.

    28 min

  3. EPISODE 3

    Private Market Alpha: Benchmarking Fund Performance

    This podcast discusses the limitations of using peer group benchmarks and public market equivalents for evaluating the performance of private market funds. It argues that these methods fail to accurately reflect private market movements and manager skill. The report introduces the concept of a Private Market Equivalent (PtME), which uses private market indices to benchmark fund performance and calculate Direct Alpha, separating market returns from manager-specific contributions. Findings suggest that on average, private equity and infrastructure funds exhibit zero alpha when benchmarked correctly, with asset allocation being a primary driver of positive alpha, while net pure alpha is often negative after fees. The document advocates for using PtMEs with tools like the privateMetrics Excel plugin to rank funds based on true alpha generation, offering a more transparent and accurate way for investors to assess private market fund performance.

    12 min

  4. EPISODE 4

    Canadian Pension Funds: The Private Equity Benchmarking Challenge

    This podcast examines the misleading benchmarking practices of Canadian pension funds in private equity. It highlights that many funds use public market proxies, which have performed exceptionally well recently, making private equity appear to underperform even when its returns are reasonable. The report introduces the private2000 index as a more relevant benchmark reflecting the specific characteristics of the private equity market, showing that recent private equity performance, while lower than long-term targets, aligns with this index. The analysis suggests that using inappropriate benchmarks hinders accurate alpha assessment and could lead to misinformed decisions by pension fund stakeholders.

    15 min

  5. EPISODE 5

    Private Equity: Market Risk and Alpha Generation

    this podcast the performance of private equity fund managers, suggesting that their returns are primarily driven by market exposure (beta) rather than superior stock-picking or market timing (alpha), similar to long-only mutual fund managers. The analysis of over 800 buyout funds indicates that median net alpha is statistically zero, with alpha being difficult to consistently generate in this mature and competitive market. The paper highlights that achieving alpha necessitates taking on market risk, as these two factors are intertwined in private equity due to the absence of short-selling or derivatives for hedging. Furthermore, the report introduces privateMetrics, a methodology for evaluating private equity fund performance against relevant private market indices to better distinguish between skill and market-driven returns, also discussing a valuation model for private companies based on various risk factors. Read more ⁠here⁠.

    18 min

  6. EPISODE 6

    Beyond the Value Bridge: Measuring True Private Equity Alpha.

    A critique of the Value Bridge Analysis (VBA), a common private equity tool for assessing deal and fund performance by attributing returns to operational improvements, multiple changes, and debt adjustments. The authors argue that VBA misleadingly suggests manager skill is the primary driver of returns and fails to account for broader market influences (beta) or provide insights into true value creation (alpha). Instead, the report champions the Direct Alpha approach, which benchmarks performance against market indices to offer a clearer understanding of a manager's genuine contribution beyond market returns. By analysing examples and different fund managers, the paper demonstrates that Direct Alpha provides a more accurate evaluation of manager skill by separating market performance from specific sources of alpha, ultimately offering a more reliable assessment for investors.

    13 min

  7. EPISODE 7

    Alpha: The Real Measure of Private Equity Performance

    This podcast by Scientific Infra & Private Assets argues that traditional private equity fund performance benchmarks, primarily IRR quartiles, are flawed because they fail to distinguish between market returns (beta) and manager skill (alpha). The authors show that relying solely on IRR can misrepresent a fund's true value-add, as market exposure can significantly influence rankings. Instead, the report advocates for evaluating fund performance based on alpha, particularly when compared to a private market equivalent or thematic benchmarks, as this provides a more accurate assessment of a manager's ability to generate excess returns. The analysis of various buyout and infrastructure funds demonstrates that many second and third quartile IRR funds still generate positive alpha, suggesting that a focus on alpha offers a more insightful perspective for limited partners seeking genuine manager skill.

    16 min

  8. EPISODE 8

    Fund Size and Alpha in Private Equity

    This podcast analyzes the performance of private equity buyout funds in the Americas and Europe between 2013 and 2023, examining the relationship between fund size and alpha generation. The study, utilizing privateMetrics data and methodology, found that smaller and mega-sized funds in the Americas demonstrated higher median alpha, while upper middle-market funds showed weaker results. European funds presented a more varied picture, with smaller funds outperforming but mega funds underperforming their American counterparts. The analysis also explores factors such as risk, manager incentives, and systematic risk to explain these performance differences across fund sizes. Additionally, the report outlines the privateMetrics valuation model, which uses a multi-factor approach to assess the value of private companies based on transaction data and common risk factors. Ultimately, the research suggests a nuanced connection between fund size and performance in private equity, highlighting the varying dynamics in different market segments.

    19 min

  9. EPISODE 9

    2025 Capital Market Assumptions: Infrastructure and Private Equity

    In this podcast, "Capital Market Assumptions 2025," from Scientific Infra & Private Assets, we presents their updated capital market assumptions for infrastructure and private equities. Utilizing their infraMetrics® and privateMetrics® indices, which track unlisted companies, they offer expected returns, volatility, and correlations across these asset classes. The report highlights that their return expectations for both infrastructure and private equity are currently elevated compared to recent history, influenced by higher government bond yields. Unlike many industry peers who apply premiums to listed assets, their approach values private assets monthly using factor-based models to provide more granular and dynamic insights, including sector-specific discount rates. The document also details their methodology and compares their assumptions to those of other major investment houses.

    13 min

  10. EPISODE 10

    Fair Asset Pricing in GP-Led Secondaries

    This Deep Dive podcast from privateMetrics, dated May 2025, primarily discusses the challenges and conflicts of interest arising from the recent surge in GP-led secondary transactions within private equity, where General Partners (GPs) act as both sellers and buyers of assets across different funds. It emphasizes the need for Limited Partners (LPs) to develop independent valuation opinions due to this altered alignment of interests. The paper introduces privateMetrics as a solution, a robust database and tool for LPs to rapidly form their own views on private company valuations, particularly in complex transactions like the Nord Anglia deal, which is used as a case study. It contrasts the privateMetrics approach with traditional, less reliable methods like public comparables and past transactions, highlighting the former's ability to provide an "anchor" valuation based on detailed company characteristics and risk factors, thus empowering LPs to make informed decisions about rolling or exiting their investments.

    14 min
  • 10 Episodes

About

A Podcast about the latest data, benchmarking and indexing innovation in private investment asset classes, including private equity, infrastructure and private debt

Information

  • Creator
    Scientific Infra & Private Assets
  • Episodes
    10
  • Seasons
    1
  • Copyright
    © Scientific Infra & Private Assets Pte Ltd