Net IRR vs Gross IRR: Which Number Belongs on Your Tracker

Net IRR vs gross IRR is a cash-flow fork, not a ranking of two scores. Gross is the deal: the IRR on the investments before management fees and carried interest. Net is the same clock after those cuts. ILPA’s private-equity glossary writes gross IRR as investment performance that does not take management fees or carried interest into account, and net IRR as the dollar-weighted return net of those items, using daily cash-flow timing and ending fair value. A personal tracker should default to the net cash you actually moved. Run those dated wires on Raziel’s IRR calculator. The sibling how to measure investment performance page is the metric stack. This page is which IRR belongs on your book.

This is not legal, tax, or investment advice. Raziel Holdings, Inc. does not provide it. Read the capital account and the LPA.

Gross is the deal. Net is after fees and carry

ILPA’s Gross IRR line is the investment book. It is the IRR of the deals, before the management fee and before carry. Preqin’s returns lesson says the same thing in shorter form: gross IRR is the fund-level return before fees or costs. Net IRR accounts for management fees and the GP’s carried interest.

CFA Institute’s GIPS Guidance Statement on Fees is the labeling rule that sits under those PE terms. Gross-of-fees is the return on investments reduced by trading expenses. Net-of-fees is that gross figure reduced by investment management fees, and those fees include performance-based fees and carried interest. If a pack prints “IRR” with no label, do not paste it into a personal tracker as if gross and net were interchangeable.

On a direct angel check with no fund wrapper, there is often no management fee and no carry on your own cash. The deal IRR and the cash IRR can match. On an LP commitment, an SPV, or a rolling fund they usually do not. Log both if the GP sends both. Default the tracker to net.

The two numbers use different cash

The gap is not only “fees came out.” ILPA’s Performance Template, for funds commencing operations on or after January 1, 2026, treats fund-level net IRR as cash between the fund and its investors, and portfolio-level gross IRR as cash between the fund and its investments. In practice, most GPs present gross IRR and MOIC off portfolio-level flows, and net IRR and TVPI off fund-level flows. Those series can start on different dates. A subscription line can fund a deal before your capital call hits. ILPA therefore asks for net IRR and net TVPI both with and without the impact of fund-level subscription facilities. Fund-level gross is optional. A 2026-vintage pack that prints one IRR with no “ex-facility” net pair is missing the pair ILPA asked GPs to show.

Copy the GP’s labeled figures onto a statement row. Do not rebuild them from a headline multiple. Your tracker’s job is the cash you wired and the cash that came back, with the dates they moved.

There is no standard spread to haircut

Do not subtract three points, five points, or any published “typical” gap from a gross IRR and call the result net. ILPA does not publish a standard spread. When the Performance Template needs a portfolio-level net figure, it says that net may be synthesized by applying that fund’s own ratio or spread of fund-level net IRR to fund-level gross IRR. That is a fund-specific multiplier, not an industry haircut. Fee load, catch-up, recycling, the subscription line, and when carry starts all move the gap. Two funds with the same gross can print different nets. Write the labeled pair, or write the cash.

MOIC vs IRR is the magnitude-versus-pace argument on the same statement. This page is only which IRR is yours.

Default the tracker to cash you actually moved

For a personal book, net means the wires that left your account and the distributions that landed, plus ending NAV if you need a since-inception figure. ILPA’s net IRR already uses daily timing and cumulative fair value as of the report date. Management-fee calls are outflows. Carry already taken is not an inflow you received. A recallable distribution that later comes back in is two events, not a net. Do not start the clock on the deal close if your first capital call landed later, and do not restart it when a SAFE converts or a follow-on closes unless new cash moved.

Gross still belongs on the file as a deal-quality note: how the investments performed before the vehicle’s cut. It is not the number you live on.

Raziel’s IRR calculator is annual cash-flow buckets: an initial investment, then year-by-year inflows or outflows. Put LP cash (calls, fee calls, distributions that actually arrived) in one run. That is the net default. A second run with deal-level contributions and proceeds, if you have them, is the gross comparison. The tool’s annual grid will disagree with a daily-dated XIRR on the same dollars. ILPA’s net definition uses daily timing, so treat the calculator as a check against the GP’s labeled net, not as a replacement for the capital-account math. If the two disagree, keep the statement’s labeled net and flag the dates. Do not overwrite your cash.

A workbook holds this if the labels hold: gross on the deal row, net on the cash row, no invented spread between them. It fails when a pitch-deck gross is stored as “my IRR.”

Raziel’s tracker is the book those dated wires already sit on. The public calculator is the same annualized math. The honest input is still the cash you moved, labeled net, with gross kept as the deal.