The problem
An IRR tells an investor what a fund returned. It does not say how much of that came from the market and how much the manager added. privateAlpha separates the two using the Direct Alpha Method: every cash flow is restated at the market's own return from the date it occurred, so the result is an annualised rate at which the fund beat or lagged its benchmark — not a return figure that blends market movement with manager skill.
Measured against the broad market, this is Total Alpha. Measured against a benchmark matched to the fund's own declared strategy, sector, and region, it is Pure Alpha — the genuine, manager-generated outperformance, and the metric privateAlpha ranks funds and GPs on.
On average, buyout funds do not beat the market (average net alpha vs. SIPA indices is zero) — this is the proof that SIPA indices genuinely represent the market. Many individual managers do beat it, some repeatedly. privateAlpha identifies who they are, and weights each fund's contribution to a GP's rank by how much of its result has been realised in cash rather than held at appraisal — its DPI relative to TVPI.
TOTAL ALPHA
Return above the whole market — the broad private infrastructure or private equity index, the only benchmark built entirely from private market transaction data, ESMA-registered and recalibrated monthly.
ALLOCATION ALPHA
Total Alpha less Pure Alpha — the part of a fund's return that came from where the manager chose to invest, by sector, geography, and strategy, rather than from how well it invested there.
PURE ALPHA
Return above a benchmark matched to the fund's own strategy — the residual not explained by the market or by allocation. Computed using the Direct Alpha Method and expressed in annualised basis points — the true measure of GP skill.
In practice
Funds reporting the same IRR can have entirely different alpha stories. Some ride the market; others genuinely beat it. privateAlpha shows you which is which — across 55 fund comparisons from the live dataset.
Methodology
For each fund with at least two years of data, privateAlpha runs a four-step computation using the Direct Alpha Method (Gredil, Griffiths & Stucke, 2023).
Compute the total alpha of each fund versus a broad market index — infra300® for infrastructure funds, private2000® for buyout funds — using the Direct Alpha Method on all cash flows.
Repeat the calculation against a custom benchmark built from the fund's own declared strategy, sector, and geography — e.g., European Contracted Renewables or US Software MidCap — isolating the manager's genuine stock-selection skill. This is the ranked metric.
For GPs with three or more qualifying funds, weight each fund's Pure Alpha by its DPI relative to TVPI — the share of total value already distributed in cash rather than held at appraisal — so a manager's rank rests on how much of its record is settled fact, not estimate.
Separately, estimate the persistence of alpha over time: how likely is a GP's next fund to deliver positive alpha? A statistically rigorous skill score, published alongside — not folded into — the rank.
Product features
privateAlpha organises its output across three integrated modules — enabling systematic fund selection and GP due diligence at scale.
Evidence
Using the private300 (or private2000) index to measure the Direct Alpha of hundreds of infrastructure and buyout funds over more than a decade produces three consistent findings — findings that validate the methodology and reveal the real opportunity in private fund selection.
Direct Alpha Method: Gredil, O.R., Griffiths, B., & Stucke, R. (2023). Benchmarking Private Equity: The Direct Alpha Method. Journal of Corporate Finance, 81, 102360.
On average, buyout and infrastructure funds do not beat the SIPA market index. This is the proof that the index genuinely represents the market — not a listed proxy or constructed hurdle rate.
Individual fund managers show a wide dispersion of alpha. Some consistently outperform across vintages, some consistently underperform. Persistence is statistically measurable.
Ranking funds and GPs on Pure Alpha — return measured against a benchmark matched to each fund's own strategy — is the most rigorous basis for fund selection: an unbiased alternative to peer-group rankings that suffer from benchmark contamination.
Access
privateAlpha is available via the dedicated web portal at pei.private-alpha.com, as well as natively in Excel for fund managers and LPs who prefer to work within their existing environment.
Qualifying institutional investors can access a Free Pro tier — including full fund rankings and selected fund profiles — with no subscription required.
Free Pro Access for qualifying institutional investors
Full access to fund rankings, GP rankings, fund profiles, and GP profiles via the dedicated privateAlpha platform. Updated monthly as new fund data is received.
Pull fund alpha, DPI/TVPI, and style scores directly into Excel models. Natively integrated for GP marketing workflows and LP due diligence teams.
Bespoke alpha scoring for a specific portfolio of funds; integration with internal investment systems; white-labelled delivery for consultants and fund administrators.
Get started
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