privateAlpha measures true fund alpha and GP alpha using SIPA's private market indices — giving institutional investors and asset managers an unbiased, scientifically rigorous basis for fund selection and performance attribution.
The problem
Every private equity and infrastructure fund operates in a market for private asset equity stakes. Depending on a fund's strategy and investment choices, it will be more or less exposed to broad market movements — this is its beta.
The part of the fund's return that is not explained by the combination of market movements and the fund's beta is the fund's alpha — the genuine, manager-generated outperformance.
On average, buyout funds do not beat the market (average net alpha vs. SIPA indices is zero) — this is the proof that SIPA indices genuinely represent the market. Many individual managers do beat it, some repeatedly. privateAlpha identifies who they are.
The broad private infrastructure or private equity market return — the only benchmark built entirely from private market transaction data, ESMA-registered and recalibrated monthly.
How much of the fund's strategy is explained by broad market exposure — determined by the fund's sector, geography, and investment choices relative to the benchmark.
The residual return not explained by market movements or fund beta. Computed using the Direct Alpha Method and expressed in annualised basis points — the true measure of GP skill.
In practice
Funds reporting the same IRR can have entirely different alpha stories. Some ride the market; others genuinely beat it. privateAlpha shows you which is which — across 60 fund comparisons from the live dataset.
Methodology
For each fund with at least two years of data, privateAlpha runs a four-step computation using the Direct Alpha Method (Gredil, Griffiths & Stucke, 2023).
Compute the total alpha of each fund versus a broad market index — infra300® for infrastructure funds, private2000® for buyout funds — using the Direct Alpha Method on all cash flows.
Determine the fund's exposure to the market index based on its strategy, sector, and geography. Each fund's beta captures how much of its return is explained by market movements.
Compute the pure alpha versus the fund's own strategy benchmark — e.g., European Contracted Renewables or US Software MidCap — isolating the manager's genuine stock-selection skill.
For GPs with at least three funds, estimate the persistence of alpha over time: how likely is GP alpha to persist across successive fund vintages? A statistically rigorous skill score.
Product features
privateAlpha organises its output across three integrated modules — enabling systematic fund selection and GP due diligence at scale.
Evidence
Using the private300 (or private2000) index to measure the Direct Alpha of hundreds of infrastructure and buyout funds over more than a decade produces three consistent findings — findings that validate the methodology and reveal the real opportunity in private fund selection.
Direct Alpha Method: Gredil, O.R., Griffiths, B., & Stucke, R. (2023). Benchmarking Private Equity: The Direct Alpha Method. Journal of Corporate Finance, 81, 102360.
On average, buyout and infrastructure funds do not beat the SIPA market index. This is the proof that the index genuinely represents the market — not a listed proxy or constructed hurdle rate.
Individual fund managers show a wide dispersion of alpha. Some consistently outperform across vintages, some consistently underperform. Persistence is statistically measurable.
Using Private Market Equivalent Alpha to select funds and GPs is the most rigorous basis for fund selection — an unbiased alternative to peer-group rankings that suffer from benchmark contamination.
Access
privateAlpha is available via the dedicated web portal at pei.private-alpha.com, as well as natively in Excel for fund managers and LPs who prefer to work within their existing environment.
Qualifying institutional investors can access a Free Pro tier — including full fund rankings and selected fund profiles — with no subscription required.
Free Pro Access for qualifying institutional investorsFull access to fund rankings, GP rankings, fund profiles, and GP profiles via the dedicated privateAlpha platform. Updated monthly as new fund data is received.
Pull fund alpha, beta, and style scores directly into Excel models. Natively integrated for GP marketing workflows and LP due diligence teams.
Bespoke alpha scoring for a specific portfolio of funds; integration with internal investment systems; white-labelled delivery for consultants and fund administrators.
Get started
Tell us about your fund selection workflow and we will arrange a personalised demonstration of privateAlpha's rankings, fund profiles, and GP scoring.
Download the privateAlpha elevator pitch — a concise overview of the methodology, product features, coverage, and key use cases.
Download PDFBenchmarking Private Market Performance: Finding Alpha in Private Market Funds — the research underpinning the privateAlpha methodology.
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