Performance Perspectives Blog

Friends of MWR & IRR

by | Jul 22, 2009

Our friend, Stefan Illmer of Credit Suisse, has launched a new group on Linkedin: Friends of MWR & IRR, and John Simpson and I are two of its early members. We are very pleased that Stefan has done this, as it’s another way to provide increased attention to our efforts to encourage folks to adopt the MWR/IRR approach to calculating returns. Arguably, Stefan, along with Steve Campisi and I, have been the three most vocal supporters on this topic, and each of us have penned at least one article addressing this topic.

What does it mean to be a “Friend” of MWR & IRR? This hasn’t yet been defined, though I suspect it includes:

  • supporting the use of MWR and IRR for most reporting scenarios
  • a desire to promote the use of MWR and IRR
  • the recognition of the MWR’s superiority over TWR in most cases.

Does it mean a total abandoment of the TWR? Absolutely not! We believe that the TWR serves a valuable role: to show the portfolio return of managers who do not control external cash flows; but that’s about it.

If you, too, embrace MWR’s role and want to see its use increased, please join!

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