Oxford Professor Questions Private Equity Return Metrics as Industry Faces Scrutiny

Ludovic Phalippou, a professor of financial economics at Oxford University's Saïd Business School, sat down with finance writer Marc Rubinstein this month to discuss the thorny question of how—and whether—private equity firms accurately measure their returns to investors.

The interview, published February 3rd on Rubinstein's Net Interest newsletter, arrives as CFOs and institutional investors increasingly question the opacity of private equity performance metrics. Phalippou, who specializes in private equity and asset management research, has built a career examining the gap between how PE firms report returns and what investors actually realize.

The conversation is the latest in Rubinstein's "Net Interest Extra" podcast series, which brings finance practitioners and academics together to dissect industry practices. (Previous episodes have tackled passive investing dynamics, private credit expansion, and blockchain infrastructure—the kind of "weird complicated niche topics" that tend to matter more than the headlines suggest.)

For finance leaders evaluating private equity allocations, the timing is notable. As of early 2026, institutional portfolios have dramatically increased their private equity exposure over the past decade, making the accuracy of performance measurement more consequential. When a pension fund reports that its PE portfolio returned 15% annually, what does that number actually mean? How much of it reflects genuine alpha versus leverage, timing artifacts, or creative accounting?

Phalippou has spent years in the weeds of these questions, examining the mechanics of internal rate of return calculations, the treatment of unrealized gains, and the structural incentives that might lead to optimistic valuations. His work challenges the industry's preferred narratives—not with hot takes, but with the kind of granular analysis that makes lawyers and accountants uncomfortable.

The interview format matters here. Rather than a written polemic, Rubinstein's approach lets Phalippou walk through the technical details conversationally. (Think of it as the bar conversation where someone who actually read the footnotes explains why the footnotes are the interesting part.) For a CFO trying to explain to a board why private equity returns might not be directly comparable to public market benchmarks, this is the kind of source material that proves useful.

The broader context: private equity firms have faced mounting pressure to justify their fee structures and performance claims. When everything is marked-to-model rather than marked-to-market, and when the people doing the marking have a financial interest in the outcome, skepticism becomes prudent. Phalippou's academic work provides the intellectual framework for that skepticism—not as cynicism, but as rigor.

What makes this particularly relevant for finance operators is the practical question it raises: if you're a corporate treasurer or CFO evaluating whether to commit capital to a private equity fund, what metrics should you actually trust? The industry has its standard presentations, its track records, its IRR calculations. Phalippou's research suggests those numbers deserve more scrutiny than they typically receive.

The interview runs approximately 50 minutes, giving Phalippou room to unpack the technical nuances that shorter formats tend to gloss over. For finance professionals who've sat through PE pitch decks and wondered about the assumptions buried in the performance slides, this is the explainer they've been waiting for.

The question everyone will be asking tomorrow: if the industry's preferred performance metrics are as problematic as Phalippou suggests, what's the alternative? And more importantly, why hasn't the institutional investment community demanded better measurement standards already?