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Public Market Equivalent
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Public Market Equivalent : ウィキペディア英語版
Public Market Equivalent
Public Market Equivalent (or PME) designs a set of analyses used in the Private Equity Industry to evaluate the performance of a Private Equity Fund against a public benchmark or index. The analysis is also referred by the acronym ICM for Index Comparison Method.
More than a specific calculation method, PME encompasses a number of different analyses sharing the same objective. The first PME analysis was proposed by Long and Nickels in 1996.
==Objective==
The two indicators used by the Private Equity industry to assess the performance of an investment are the Internal Rate of Return (IRR) and the Market Multiples. These indicators can allow comparison between private investments, but not with other asset classes which are using time-weighed rate of returns (TWR). The public market equivalent aims to benchmark a private investment against a public benchmark or index.
PME Analyses can be divided into two groups, depending on the general method used to calculate them. Heuristic PMEs (LN-PME, PME+, mPME) simulate the investments of the Private Equity cashflow into a theoretical benchmark investment. The KS-PME, Direct Alpha and PME Alpha start with the definition of alpha in Modern portfolio theory, and extend it to Private Investments.

抄文引用元・出典: フリー百科事典『 ウィキペディア(Wikipedia)
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