Oxford Professor Questions Private Equity’s Performance Claims as CFOs Face Allocation Pressure

Oxford Professor Questions Private Equity's Performance Claims as CFOs Face Allocation Pressure

Marc Rubinstein's latest Net Interest podcast features Ludovic Phalippou, a Professor of Financial Economics at Oxford University's Saïd Business School, discussing the thorny question of how to accurately measure private equity returns—a conversation arriving as finance chiefs navigate mounting pressure to allocate capital to alternative assets.

The interview, published February 3, 2026, tackles Phalippou's specialty: dissecting the performance metrics that private equity firms present to investors. For CFOs managing corporate pension funds or treasury investments, the timing is pointed. The conversation comes as institutional allocators face persistent pitches from PE firms armed with performance data that Phalippou has spent his academic career scrutinizing.

Phalippou, who authored a book on private equity, has built a reputation for challenging the industry's self-reported performance figures. His research focuses on the methodological quirks—how internal rates of return can be gamed, how fund-level returns differ from investor-level returns, and how the timing of cash flows can create optical illusions in performance data.

The podcast format allows Rubinstein, a former investment banker who now writes the Net Interest newsletter, to walk through the technical mechanics of PE return measurement. For finance leaders evaluating whether to commit capital to private equity funds, the conversation offers a rare academic perspective on an industry that typically controls its own narrative.

The interview arrives as private equity firms are raising record amounts of capital while facing questions about whether their historical outperformance over public markets has narrowed. CFOs sitting on corporate balance sheets or overseeing defined benefit pension plans are being asked to make allocation decisions based on performance data that Phalippou's work suggests may not be directly comparable to public market benchmarks.

What makes the conversation particularly relevant for finance operators is the disconnect between how PE firms present returns and how those returns actually compound for investors. The difference between gross and net returns, the impact of management fees and carried interest, and the effect of capital call timing all create complexity that can make apples-to-apples comparisons difficult.

The full episode runs 50 minutes and is available only to paid subscribers of Net Interest, reflecting the specialized nature of the content. For CFOs who've sat through PE fund pitches and wondered whether the performance claims hold up under scrutiny, Phalippou's academic lens offers a counterweight to the industry's marketing materials.

The conversation also touches on Phalippou's broader work on asset management, suggesting that the measurement challenges in private equity aren't unique—they're part of a larger pattern of how alternative asset managers present performance data to institutional investors.

As corporate treasurers and pension fund overseers face continued pressure to diversify beyond public markets, the interview serves as a reminder that the due diligence process needs to extend beyond the glossy pitch decks. The question isn't whether private equity can generate strong returns—it's whether investors can accurately measure those returns and compare them to alternatives.