Belief Function model of private equity fund performance measurement

摘要

This article applies Dempster-Shafer evidence theory to probe the private equity fund performance evaluation issues, get the Belief Function model to evaluate the performance of a private equity fund. This article does not intend to discuss the relevance and completeness of indicators, nor does it intend to submit other views and ideas. This article firstly assumes that the performance measurement system had already been established, and then discusses the problem how to quantify these indicators (including qualitative indicators and quantitative indicators) by scoring or other appropriate methods. Next all of the scores will be combined based on the theory of Belief Function to get a comprehensive performance measurement indicator. The final indicator can be used to fund ranking. It is expected that this ranking is more objective and more comprehensive than the one based on a single indicator, such as IRR. In addition, the indicator, as well as the method discussed in this article has a great reference value to help the institutional investors to choose the fund. In the PE firm, the indicator can be used as a benchmark for the performance measurement of fund managers or investment managers. Finally, the indicator is also helpful for the government regulators and industry associations to understand PE funds.