Chicago, IL – The NCREIF PREA Reporting Standards (Reporting Standards) today announced the publication of a new white paper, Increasing Transparency in Performance Metrics for Private Closed‑End Funds, offering long‑awaited industry guidance aimed at enhancing clarity, consistency, and comparability in performance reporting for private closed-end real estate funds.
Developed by the Reporting Standards Performance Disclosure Task Force along with members of the Fee and Expense Disclosure Task Force, the white paper consolidates extensive industry input and addresses three critical topics where formalized guidance has been limited:
- Net fund‑level IRRs calculated with and without subscription facilities
- Gross IRRs for realized vs. unrealized portions of fund portfolios, shown separately
- Clarification on the calculation and use of multiples reported alongside IRRs
Although the SEC’s 2023 Private Fund Adviser Rule was vacated by the Fifth Circuit Court in 2024, the task force elected to publish the work it completed in response, recognizing its value to investors, managers, consultants, and service providers across the private real estate industry.
The Reporting Standards Board noted that transparency and comparability in private fund reporting are more critical than ever, adding that the initiative demonstrates the industry’s shared commitment to best-practice reporting, independent of regulatory developments.
Key Insights from the White Paper
• IRR With and Without Subscription Facilities
The guidance provides standardized methodology for evaluating the impact of subscription‑secured credit facilities – widely used to manage capital call timing – on fund‑level IRR calculations.
• Separate Realized and Unrealized Gross IRRs
Based on a survey of industry managers, the paper outlines consensus best practices for separately calculating realized and unrealized IRRs using investment‑level cash flows.
• Clarification on the calculation and use of multiples reported alongside IRRs
The paper highlights the calculation and use of Multiple on Investment Capital (MOIC) in private equity and Investment Multiple/Total Value to Paid-in Capital Multiple (TVPI) and three additional multiples in private real estate, clarifying definitions and ensuring alignment across reporting. It provides detailed input definitions at fund, investment, and property levels in private real estate.
Industry Impact
This white paper reinforces the Reporting Standards’ decades‑long mission: to support transparent, decision‑useful reporting for institutional private real estate.
It also underscores the continued relevance of existing standards such as the IRR hierarchy and the Total Global Expense Ratio (TGER) offering interpretive guidance for their use across templates and investor reporting requests.
About the Reporting Standards
Co‑sponsored by the National Council of Real Estate Investment Fiduciaries (NCREIF) and the Pension Real Estate Association (PREA), the Reporting Standards have served as the authoritative industry benchmark for over 30 years. Built “by the industry, for the industry,” the framework reflects broad consensus and practical application across institutional private real estate.
Availability
The full white paper, Increasing Transparency in Performance Metrics for Private Closed‑End Funds, is available at:
www.reportingstandards.info
Media Contact
NCREIF PREA Reporting Standards
administrator@reportingstandards.info
www.reportingstandards.info
NCREIF PREA Reporting Standards 