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Ask two managers for the same fund's TVPI and you can get two different numbers, both defensible. One divides total value by capital called for investments. The other puts management fees and fund expenses in the denominator too. Same fund, same date, lower multiple.
That is the benchmarking problem in one line. Private fund performance is reported in a handful of standard-looking acronyms that are not standardized underneath, so a number that looks precise is often not comparable to the number sitting next to it.
For anyone raising capital, the practical version of this shows up in a single question from an allocator or consultant: how does this compare to the benchmark? Answering it well requires knowing which metric, measured how, as of when, against which peer group.
In this article, we'll walk through four reasons private fund benchmarks are so difficult to produce and rely on, and what it takes to build a comparison that holds up.
Top 4 Reasons Private Fund Benchmarks Are Difficult to Report
1. Everyone Measures Performance Differently
Managers do not lead with the same metric. Some open with net IRR, others with TVPI or DPI, and RVPI enters when a portfolio still carries unrealized value. Each measures something real. None of them measures the same thing.
The definitional gaps are where comparisons break:
- Net IRR is the only one of the common metrics that accounts for timing. A fund returning 1.5x in two years can post a higher IRR than a fund returning 3.0x in ten. Neither is misreporting.
- TVPI always equals DPI plus RVPI, and the split matters more than the total, because it separates value that has become cash from value still carried at the manager's own mark.
- MOIC and TVPI are not interchangeable. MOIC divides total value by capital invested into portfolio companies and is normally quoted gross of fees. TVPI divides by capital called from investors and is normally net. Comparing a gross MOIC against a net TVPI overstates performance by the entire fee and carry load.
- Paid-in capital is not always defined the same way. When two sources disagree on the same fund's multiple by a fraction of a turn, the denominator is usually why.
For a fundraiser, strong numbers are not the problem. Explaining how they sit against peers is, because the peers are quoting different constructions of the same word.
2. Timing Is Not Aligned Across Managers
Two managers reporting the same metric still may not be comparable. Some report quarterly, others annually. One includes intra-quarter distributions, another does not. Currency movement adds another layer before performance is even discussed.
Vintage year is the sharper version of the same issue. DPI is only meaningful against funds of the same vintage and strategy: a 2023 fund is expected to show near-zero DPI, while a 2014 fund should be well past 1.0x. Placing them in the same table produces a ranking that measures fund age, not manager skill. Comparing IRR across vintages carries the same trap.
Uncalled capital compounds it. It sits outside all of the standard metrics, so a fund that has called 40% of commitments and one that has called 95% can post identical TVPI while representing very different amounts of committed but unexposed capital.
See where a fund actually stands. Dakota Private Markets holds 159,000+ performance records across 18,000+ funds, with net IRR, TVPI, DPI, and RVPI standardized for direct comparison across strategy and vintage. Build the peer group by vintage year, asset class, sub-strategy, geography, or fund size. Request access.
3. Gross vs. Net Performance Is Not Always Clear
Some managers report gross of fees, some net, some include carried interest, some do not, and the basis is frequently not labeled.
The gap is not cosmetic. Gross performance strengthens the headline, but net return is what an allocator actually receives, and the difference between the two is the fee and carry load. On the same fund, gross MOIC will always read higher than net TVPI.
This is also why DPI carries weight in diligence out of proportion to how often it leads a deck. It is the only common metric a manager cannot influence through valuation marks. Cash returned is cash returned.
4. Valuations Are Subjective by Nature
Private portfolio companies are not priced daily. Some managers value with discounted cash flows, others with comparables or recent transactions, and even where the method matches, the assumptions rarely do. Some revalue quarterly, some annually. Some are conservative, some are not.
RVPI is where that subjectivity concentrates. A high RVPI is neither good nor bad on its own: it means a large share of the fund's value is still unrealized and carried at the manager's own valuation, which raises the importance of exit performance rather than indicating upside. Valuations also lag market moves, often by a quarter or more, so two funds marked on different schedules are not marked against the same market.
None of these choices is unreasonable in isolation. Together they mean a cross-fund comparison of unrealized value is comparing methodologies as much as performance.
Why This Matters for Fundraisers
The cost of all this is not confusion. It is false precision. Reported numbers carry two decimal places and look authoritative, and the peer set they are compared against was often never constructed to be comparable in the first place.
That shows up in specific moments in a raise: preparing for a roadshow, answering a consultant's questionnaire, defending a track record in diligence, or responding to a peer group an allocator assembled without you. In each one, the fundraiser who can say exactly what their number measures and against which cohort has an advantage over the one quoting a stronger number with no basis attached.
How Dakota Private Markets Closes the Gap
Dakota Private Markets holds 159,600+ performance records across 18,000+ private funds in seven asset classes, with net IRR, TVPI, DPI, and RVPI standardized for direct comparison across strategy and vintage. Every record is reviewed by Dakota's research team before publication rather than auto-populated or taken from a single manager's marketing materials.
Coverage as of July 30, 2026 spans 5,200+ private equity funds, 4,600+ private real estate funds, 1,900+ private credit funds, 1,300+ real assets funds, 1,100+ venture capital funds, and 550+ private infrastructure funds, plus evergreen and interval vehicles and hedge funds, two categories most legacy performance databases do not track at all.
Custom benchmarking is what actually solves the standardization problem. Rather than citing whatever benchmark happens to be available, you define the cohort your fund gets measured against: same vintage, same strategy, same geography, comparable fund size, and where it matters, the same portfolio company sector.
That comparison is then yours to bring to a consultant questionnaire or a data room, instead of answering to a peer group that was never constructed to be comparable.
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