Measuring value drivers when the portfolio company’s native currency is different from the GP or LP.
Module Category: Fees, Expenses, Carry, and FX
Value Drivers: FX
Key Concept: The foreign exchange market affects private equity returns whenever an LP’s home currency differs from a GPs, or whenever a Fund’s home currency differs from a portfolio company’s. In such cases, value creation measurements can be converted to the home currency and a new value driver for the Foreign Exchange Impact should be introduced.