Term: Benchmark

A performance standard against which all other performances are measured and evaluated. For example the S&P 500 is seen as a benchmark of public market performance – if you outperform the S&P 500 you’re beating the benchmark. In private equity public market indices are often used as benchmarks and in many cases the benchmark is defined as a well known index plus several hundred basis points – meaning simply matching a public market performance isn’t good enough as a private equity investor. As in: What is the appropriate benchmark for an allocation to infrastructure?

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