When an article on some research on Private Equity valuation convey trivial messages...

I came across this article from Institutional Investors and it strikes me to see that people (even researchers) tend not to know how PE managers value practically their portfolio companies...  

So let's speak about the way portfolio companies are valued in quarterly reports... PE managers use a mix of methods to value their investments... DCF, multiple and public market comparables. Then they make an average.

If public markets go up, then Price Earning ratio goes probably up for most comparables. Also it means that the economy goes probably better, hence better results. Lots of money pouring into the economy, so probably private markets transaction are valued 0,5-1 turn more. In recent years, low interest rates, meaning lower WACC (everything else being equal), hence DCF results go mechanically up. 

So I am quite sure in most cases there is clearly no intention, just the application of the same valuation methodology across periods.

Also the only thing that professional LPs look at are exits and cash on cash multiple on invested capital. Unrealized deals are interesting though, because looking at them in détails gives you a hint of the global health of a portfolio (sales, profits, cash flows going up or down).  But you never take any (self) valuation for granted! In real life, you only look at money at the bank when the portfolio investment is sold.

On a side note... performance is often exaggerated when a new fund is being raised. That is something that every professional LP knows and investigates. Nothing new here.

Maybe the research says more than the article - but the issues raised are nothing but normal (and should have been expected).