An Empirical Guide to Investor-Level Private Equity Data from Preqin

This note provides guidance on the use of investor-level private equity data from Preqin for empirical research. Preqin primarily sources its cash flow data through Freedom of Information Act (FOIA) requests with U.S. public pensions. Our focus is on the components of these data that are used for calculating returns on investments made by individual public pensions into private market vehicles, most notably private equity. We discuss how accounting practices may impact cash flow variables, document the prevalence of data quality and other measurement error issues, and recommend transparent adjustments that deliver reliable estimates of net-of fee returns that are comparable across investors and time.