What are the GIPS requirements for reporting private equity fund performance?

Private equity gets its own set of GIPS provisions because the asset class fundamentally differs from traditional liquid investments.

Key PE-Specific Requirements

1. Since-Inception Internal Rate of Return (SI-IRR)

PE funds must present the SI-IRR as the primary return metric, not time-weighted returns. The IRR correctly captures the impact of the fund manager's capital call and distribution timing.

2. Annualization Rules

• SI-IRR must be annualized if the fund has been in existence for more than one year
• If less than one year, present the non-annualized cumulative IRR

3. Vintage Year

Funds must be classified by vintage year (the year of the fund's first drawdown of capital). This allows meaningful peer comparison since PE returns are heavily influenced by the economic cycle at entry.

4. Committed Capital and Paid-In Capital

Firms must present:

• Total committed capital (what LPs have pledged)
• Cumulative paid-in capital (what has actually been called)
• Cumulative distributions (what has been returned to LPs)
• RVPI (residual value to paid-in capital)
• DPI (distributions to paid-in capital)
• TVPI (total value to paid-in capital = RVPI + DPI)

The TVPI Framework

Example — Thornbury Capital Partners Fund IV

5. Valuation

PE portfolio companies must be valued at fair value using recognized methodologies. Firms must disclose the valuation approach (comparable transactions, DCF, market multiples).

Exam tip: Know that PE uses SI-IRR (not time-weighted), must report vintage year, and must present the capital multiples (DPI, RVPI, TVPI). These are among the most tested GIPS provisions.

For more GIPS study material, check our CFA ethics course.