Last month, a remarkable performance took place at a local Parkrun event that went largely unnoticed by the mainstream media. Ben White, a 90-94 category runner, clocked in with a time of 26:47 for the 5km race, placing 261 out of 569 finishers. Despite not making it to the podium, White’s time was nearly three minutes faster than the World Masters Athletics record, earning him a statistically incoherent 132 per cent on Parkrun’s age grading system.
The extraordinary feat raises questions about the validity of such performances in non-competitive fun runs. Speculations about doping are quickly dismissed, given the risks involved for a nonagenarian athlete. Instead, the focus shifts to accepting the improbable and celebrating the incredible achievement.
Switching gears, private equity giant KKR has been making waves in the UK market with its recent activities involving potential bids for companies like Thames Water, GlobalData, and Assura. However, what truly captures attention is KKR’s reported performance metrics. Since going public in 2010, KKR has consistently touted an impressive annual return rate of around 25.5 per cent for its managed funds with at least 24 months of investment activity since 1976. The remarkable consistency in these figures, with minimal year-to-year variance, raises eyebrows and prompts further scrutiny.
While KKR is not alone in its claims of superior long-term performance, the private equity sector as a whole has often been lauded for its outperformance compared to traditional asset classes. However, there are significant caveats to consider. The historical focus on specific sectors, reliance on leverage during favorable market conditions, and illiquidity of private equity investments all contribute to a complex investment landscape.
In the UK’s investment trust sector, private equity funds have faced challenges in recent years, with stagnant deal flow and rising interest costs impacting performance. While some funds continue to highlight impressive IRR metrics, the focus is shifting towards transparency and proper measurement of underlying portfolio value.
Ultimately, the true test of performance lies in the ability to generate returns through exits and new investment opportunities. As investors navigate the evolving landscape of private equity investments, a critical eye towards measuring performance accurately and transparently will be key.