Fund-Level
GP-Level
Market Level
Learn
Connect
About
Morgan Holycross, Marketing Manager · August 05, 2026
Data sourced from Joe, the private fund performance platform powered by Dakota. Learn More | Request Access
Every other metric on a fund report, TVPI, DPI, RVPI, IRR, answers a version of the same question: how did this fund do relative to the capital put into it?
PME asks a different question entirely: how did this fund do relative to simply investing that same capital in the public markets instead?
In this article, we're breaking down what PME actually measures, how it's calculated, and why it's the metric that answers the question allocators actually care about most, opportunity cost. By the end, you'll know exactly what a PME number means and how to read it against the rest of a fund's track record.
PME, Public Market Equivalent, compares a private fund's cash flows to what the same cash flows would have earned if invested in a public market index on the same dates instead. Rather than producing a standalone dollar figure like TVPI, PME is expressed as a ratio or a relative outperformance figure against a benchmark, commonly the S&P 500, Russell 2000, or MSCI World, depending on the fund's strategy and geography.
The most widely used version, the Kaplan-Schoar PME (KS-PME), is calculated as:
KS-PME = (Present Value of Distributions, discounted at index returns) / (Present Value of Contributions, discounted at index returns)
A KS-PME above 1.0x means the fund outperformed the chosen public index on a dollar-weighted basis. A KS-PME below 1.0x means an investor would have done better simply buying the index.
TVPI and IRR both have a structural blind spot: they measure a fund against itself, not against what capital could have earned elsewhere. A 15% IRR looks strong in isolation, but experienced allocators don't take it at face value, and if the public markets returned 22% annualized over the same holding period, that fund actually destroyed relative value even while posting a positive return.
PME fixes that by discounting a fund's actual capital calls and distributions using the timing and magnitude of a comparable public index's returns, then comparing the result to what the fund actually delivered. It directly answers the question every allocator is implicitly asking: was illiquidity worth it?
Assume an investor commits capital to a fund and, discounted against the S&P 500's actual path over the same period, that capital would have grown to $120M if left in the index instead. If the fund actually returned $132M in present-value terms, the KS-PME is 132/120, or 1.1x. The fund beat the public market benchmark by roughly 10% on a dollar-weighted basis, even if its raw IRR or TVPI looks unremarkable next to a different fund's numbers.
PME is only as good as the benchmark chosen. A buyout fund benchmarked against the S&P 500 and a growth equity fund benchmarked against the Russell 2000 aren't measuring the same thing, and comparing PMEs across funds using different benchmarks is close to meaningless. The benchmark has to reflect the actual opportunity set the fund's capital would have competed with.
PME also says nothing about risk. A fund can post a strong PME while having taken on leverage, concentration, or illiquidity risk that a public index investor never assumed. Outperforming the S&P 500 on a dollar-weighted basis doesn't mean the fund did so on a risk-adjusted basis.
Request access to Joe and see PME alongside TVPI, DPI, RVPI, and Net IRR at the fund level, benchmarked against the same peer set an allocator would actually build in diligence.
Every PME figure a fund manager or allocator calculates depends on having clean, dated cash flow data to work from, which is exactly what Joe standardizes. Joe tracks Net IRR, TVPI, DPI, and RVPI at the fund level across 18,000+ named private funds spanning seven asset classes, giving the underlying cash flow timing PME calculations actually require.
The data behind those numbers is dual-sourced: public filings scraped and cleaned from SEC disclosures, Form D filings, and pension filings, combined with direct manager submissions through Dakota's GP relationship network. A 60+ person data team reviews and reconciles both streams before anything is published, which matters for PME specifically since a benchmark comparison is only as reliable as the accuracy and timing of the underlying capital calls and distributions feeding it.
Get access to Joe and see fund-level performance data structured to support PME, TVPI, DPI, RVPI, and Net IRR calculations, benchmarked against the peer group that actually matches how a fund invests. Request access to see how it works.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis at ante dui. Duis euismod quam sed lectus ornare tempus. Morbi rhoncus urna et ante interdum imperdiet. Cras sit amet sodales arcu, ac rutrum turpis. Aliquam et tempus ligula, at eleifend diam.
©2025 All Rights Reserved Joe Powered By Dakota Privacy Policy | Terms of Use
