Gross vs net returns
Return measures that differ in their treatment of specified fees, expenses and carried interest. Their meanings depend on the reporting basis, cash flows and adjustments, so the gross-to-net reconciliation must be stated.
Gross vs net returns in practice
A comparison should identify whether it reports investment, fund or investor returns, the cash flows and dates used, and which costs are already included. An enterprise sale price is not itself a gain or an equity return. No return can be inferred without the corresponding investment and proceeds basis.
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| Question | Gross measure | Net measure |
|---|---|---|
| Level | Identify investment or fund basis | Identify fund or investor basis |
| Costs | Some portfolio or transaction costs may already be included | Identify additional fees, expenses and carry deducted |
| Comparison | Use stated cash-flow dates and valuation basis | Reconcile to the corresponding gross measure |
| Users | Managers and investors may report it | Managers and investors may report it |
Terms Related to Gross vs net returns
Top-quartile · DPI · TVPI · Carry · All of the glossary