@Russell Gronsky to piggy back on @J Scott IRR is one of the top return metrics that you should focus on no question - But its interesting. The big Wall St players have been able to manipulate it and I think we will begin to see that in some larger syndication deals going forward. It's actually the reason Warren Buffet doesn't like Private Equity.
Buffet states 'Firms will include money that's waiting to be deployed, such as funds sitting in Treasury Bills, when charging management fees. But they'll exclude those funds when calculating the internal rate of return'.
There are others ways you can manipulate IRR besides frequent distribution as well such as using capital calls. Asking for money in subsequent phases increases IRR since again its time sensitive (but you know the capital call is coming so you as an investor have to earmark that cash on the sidelines for when its called). Because of this its definitely important to look at other metrics as well when evaluating a deal such as equity multiple that may paint a better picture of the investment than just the IRR alone.
