AIF Returns in India: How to Verify What a Fund Reports
Understanding the AIF Decision
A target return is an objective, not a result. A gross fund IRR may exclude investor-level fees, carry and taxes. NAV growth may rely on valuations of assets that have not been sold. Verification begins by identifying exactly what number is being shown.
Reading the Structure and Economics
Ask whether performance is gross or net, fund-level or deal-level, and since inception or for a selected period.
Read IRR together with TVPI and DPI: IRR reflects timing, TVPI total value and DPI cash returned.
Compare the same vintage and strategy; public-market CAGR is not automatically comparable with cash-flow-based private-market IRR.
Where the Investor Can Get Caught
Subscription lines and early distributions can affect IRR.
A strong TVPI with low DPI may still depend heavily on unrealised marks.
A median fund claim can hide wide dispersion between investors or schemes.
Making the Allocation Decision
Before acting, answer five questions in writing: obtain cash-flow-level performance where permitted; reconcile called capital and distributions; separate realised from unrealised value; review valuation methodology and frequency; and ask for predecessor attribution and loss cases.
The most reliable performance story connects every return number to actual cash flows and independently governed valuations.
Key takeaways
- Ask whether performance is gross or net, fund-level or deal-level, and since inception or for a selected period.
- Subscription lines and early distributions can affect IRR.
- The most reliable performance story connects every return number to actual cash flows and independently governed valuations.
Related questions
What should an investor verify first?
Ask whether performance is gross or net, fund-level or deal-level, and since inception or for a selected period.
How does the structure affect the investor’s outcome?
Read IRR together with TVPI and DPI: IRR reflects timing, TVPI total value and DPI cash returned.
What is the main downside to test?
Subscription lines and early distributions can affect IRR.
How should the final decision be made?
The most reliable performance story connects every return number to actual cash flows and independently governed valuations.
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