1. Overview
  2. Solutions

Use Case Performance Attribution

The value bridge cannot tell you if a manager delivered alpha.

It is an accounting exercise. It credits growth, margin expansion, and debt repayment to the manager, and stays silent on the market that produced much of the return. Measured against a repriced private-market benchmark, the verdict often changes.

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The Problem

A value bridge measures growth. It doesn't measure skill.

Every buyout value bridge tells the same kind of story: initial equity grows through revenue growth, margin expansion, multiple expansion, and debt paydown, arriving at an ending equity value and a headline IRR or MOIC. That accounting identity is real — but it is silent on whether any of it required skill. Margin expansion credited to the manager may simply track the sector; multiple expansion may just be the market re-rating on exit. Without a market benchmark repriced to the same sector and vintage, a value bridge cannot separate manager skill from market return.

18.1%
of Clayton Dubilier & Rice Fund IX's 23.0% IRR was market return — not manager skill
−1.7%
Direct Alpha at Francisco Partners IV — a top-quartile 2015 vintage fund
+36.8%
Direct Alpha at Francisco Agility — the same house's 2017 vintage fund

Source: privateMetrics®, Preqin. SIPA analysis — “Bridge to Alpha”.

Case Study

Same deal. Two stories.

KPS Capital Partners · TaylorMade Golf, 2017–2021

Run the standard value bridge and a Direct Alpha bridge on the same buyout, and they answer two different questions. One shows how the equity grew. The other shows how much of that growth was actually earned.

Value Bridge

MOIC
1.0x

Initial
equity

+0.9x

Growth

+13.9x

Margin
exp.

−8.5x

Multiple
exp.

0.0x

Debt
repay

7.4x

Ending
equity

Every bar is an accounting identity, not a benchmark. +13.9x of margin expansion is credited to the manager by construction — the market the deal was bought and sold into never appears.

Alpha Bridge

Direct Alpha · Gross IRR
32.4%

Market
return beta

+12.0%

Sector
selection alpha

+20.4%

Pure
alpha skill

64.7%

Total
return

Priced against private2000® and the PECCS® sector index, the same return splits: 32.4% market, 32.4% alpha — of which 20.4% is pure skill. The deal was exceptional, and now that is provable.

Source: privateMetrics®, PitchBook. SIPA analysis — “Bridge to Alpha”. Stylised on a USD200m entry equity cheque; reconstructed to match the shape of the published figures, not exact extracted values.

The Method

Powered by the Direct Alpha Method

SIPA's privateAlpha™ applies the Direct Alpha Method to every fund cash flow, benchmarked against privateMetrics® and infraMetrics® mark-to-market indices — decomposing gross performance into the market return an investor would have earned in a matched listed-equivalent benchmark, the return attributable to sector selection, and the pure alpha left over. The same logic applies at fund level or, as in the case study above, deal by deal.

Explore privateAlpha™

Direct Alpha Method: Gredil, O.R., Griffiths, B., & Stucke, R. (2023). Benchmarking Private Equity: The Direct Alpha Method.

Methodology

Read the full analysis

“Bridge to Alpha” sets out the full case study and methodology behind repricing value creation against a private-market benchmark.

White Paper · PDF · July 2026

Bridge to Alpha: Repricing Value Creation Against a Private-Market Benchmark

How the standard value bridge hides market return inside manager skill, and how the Direct Alpha bridge separates the two — with the Clayton Dubilier & Rice, Francisco Partners, and KPS Capital Partners / TaylorMade Golf case studies.

White Paper · PDF · 2026

Benchmarking Private Market Performance: Finding Alpha in Private Market Funds

Using cash-flow data from private equity buyout and infrastructure funds, this paper compares peer-group methods, public market equivalents, and the privateMetrics® index approach to fund-level alpha measurement.

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