Core Insights - The internal rate of return (IRR) is often misrepresented in the private equity industry, leading to inflated performance claims that do not reflect actual cash returns [3][7][10] - The complexity and opacity of private market returns pose challenges for individual investors trying to assess fund performance [4][12][14] Investment Metrics - The IRR can be easily manipulated and does not equate to actual cash returns, which can mislead investors [2][3][10] - Alternative metrics like Public Market Equivalent (PME) and Distribution to Paid-In Capital (DPI) are being adopted to provide clearer comparisons to public market returns [8][9][10] Market Access and Regulation - A small percentage of plan sponsors have begun to offer alternative assets in retirement plans, a trend likely to increase due to regulatory changes [5][16] - The introduction of private equity and alternative investments into 401(k) plans may provide new opportunities for individual investors, albeit with limited options [6][17] Performance Comparison - Private equity returns are often compared to underperforming indices, which can skew perceptions of their performance [11][12] - The valuation of private assets relies heavily on subjective assessments, making it difficult to ascertain true performance without actual sales [13][14] Fiduciary Responsibilities - Professionals managing 401(k) plans have a fiduciary duty to act in the best interests of participants, which includes evaluating private fund options responsibly [15][16]