What happens when private market investments fall short of expectations and how should investors respond?

In this episode of The Wealth Enterprise Briefing, Michael Zeuner, managing partner, and Matt Farrell, deputy CIO of WE Family Offices, discuss what families are seeing in their private capital portfolios this year. After optimism earlier in 2025, distribution activity has slowed, and many investors are left questioning whether these holdings are delivering on their goals.

Michael and Matt address the frustration many investors are feeling, including declining IRRs, softer MOICs and fewer realizations, and explain why standard metrics may not tell the full story. They introduce the Public Market Equivalent (PME) as a tool for comparing private returns to public benchmarks and emphasize the importance of consistent commitments, disciplined manager selection and keeping private markets aligned with the family's broader plan.

Topics covered include:

Why IRRs can decline even if company fundamentals stay the same
The role of the illiquidity premium in private market returns
How PME compares actual outcomes to what public benchmarks would have delivered
Why benchmarking private funds against peers is harder than it sounds
What to ask when evaluating managers' models and assumptions

As Michael and Matt note, confidence in a long-term plan depends not just on results, but on knowing what to measure and why.

If you'd like to discuss how this may relate to your family's holdings, please don't hesitate to contact us.

Important Information:

The Wealth Enterprise Briefing contains our current opinions and commentary, which are subject to change without notice. The Briefing is distributed for informational and educational purposes only and does not consider the specific investment objective, financial situation or particular needs of any recipient. Information contained herein has been obtained from sources we believe to be reliable, but we do not guarantee its completeness or accuracy. The information in the Briefing is not a recommendation of any security, and should not be relied upon as investment, legal or tax advice. Please consult with your investment, legal and tax advisors regarding any implications of the information presented in this presentation.

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