IRR Illusion: The Private Equity Performance Mirage That Retail Investors Must See Through

  • Author:
    Geoff Robinson
  • Level: 
    Intermediate to advanced
  • Study time:
    5 minutes
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Course overview
Private equity firms often tout IRRs exceeding 25%, seducing investors with promises of sustained outperformance. But behind these numbers lies a misleading metric. IRR isn’t a true rate of return — it assumes unrealistic reinvestment rates, is path-dependent, and barely budges after early wins.

This video unpacks the mechanics behind the illusion, explains how fund managers game it, and reveals the consequences for capital allocation and investor decision-making. With retail investors increasingly exposed to PE, understanding IRR’s limitations is more important than ever. We explore modest remedies and call for a shift toward transparency and honesty in performance reporting.


What's included?

  • 1  video
  • IRR isn’t a rate of return — it’s a return to illusion. Investors deserve better.
  • Insights from a #1 ranked data-driven analyst

Who should watch this playlist? 

This video is a must-read for investment analysts, portfolio managers, and fiduciaries evaluating private equity allocations. It also serves as a critical primer for financial educators, institutional asset allocators, and retail investors being lured into private markets by sky-high return claims. Learn how IRR distorts, deceives — and persists.


Why TheInvestmentAnalyst.com?

We are the only training house that is able to bring top-ranked analyst experience into your classroom. We buck the trend. Most training businesses recruit junior ex-bankers to become their trainer. Our instructors cut their teeth teaching and then gain senior experience with investment banks.

We believe, you could not be in better hands.

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Geoff Robinson
FCA FMVA MFM

Thought leader, instructor, writer, financial influencer, Former UBS Managing Director and 8x #1 ranked analysts EMEA Institutional Investor Survey
ABOUT Geoff
Geoff has had a varied career. He was a Managing Director within UBS Equity Research, leading their Global Fundamental Analytics franchise. During this time, he was #1, ranked 9x in the EMEA Institutional Investor Survey. Before UBS, he was a material equity investor and LBO co-investor in two market exited training consultancies. Geoff has a passion for learning and is well-known for his ability to break down complex subject matter and distil it to an audience in a digestible and engaging manner. He brings this passion to TheInvestmentAnalyst.com. 
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