Deal level metrics enable LPs to evaluate how a manager is adding value to the underlying companies within a fund. Metrics can also be used to help LPs understand the risk associated with an investment, the overall health of the investment and benchmark the investment to the broader markets (in terms of valuation, performance, risk, etc.).
Through understanding exactly what these metrics are measuring, LPs can get an understanding of where GPs are driving value and how this compares to other GPs.
Deal Level Metrics: The Basics
The most common deal level metrics, and their respective definitions, are as follows: