Term: Internal rate of return (IRR)

The most-often used standard of performance measurement in private equity. An IRR refers to the average annualized increase in the value of a deal or fund. A gross IRR is the return before any fees are taken out and net IRR states the return as experienced by the investor after all fees are taken out. As in: Our fund was formed in 2006 and currently has a net IRR of 25 percent.

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