Patent ID: 7058583

Claim:
A process for determining a numerical value of a manager's performance in a private portfolio comprising: (a) determining an internal rate of return for the private portfolio by scaling the portfolio to a neutral weight portfolio with a common start date that is the earliest start date in the portfolio; (b) determining an internal rate of return for the private portfolio with actual investment weights with a common start date that is the earliest start date in the portfolio; (c) determining an internal rate of return for the private portfolio scaled to a neutral weight with actual start dates; (d) determining an internal rate of return for the private portfolio with actual weights and actual start dates; (e) algebraically combining the internal rates of return of steps (a)–(c) to determine a manager's return; and (f) subtracting the manager's return from a portfolio index to produce a numerical value of the manager's performance, wherein the portfolio index is the internal rate of return of a neutral-weight portfolio with zero-based start date.