Under-Reporting Of Returns By Alternative Asset Funds

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Jeffry Haber
Andrew Braunstein


Alternative assets, returns, reported returns, transparency


Self-reported interim rates of return have always drawn a skeptical eye. Alternative assets have generally provided the least transparency of any investment class, and thus the reported returns have often been considered suspect. A previous study compared the reported returns for a sample of alternative asset funds to the “true” returns (with the “true” return being defined as the rate of return needed to equate the cash flows from the investment), and found that the alternative asset funds generally provided accurate returns. This paper (using the same data set) examines the issue from a different perspective, and concludes that every single alternative asset fund in the sample actually under-reported the rate of return.


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