Despite the rebound in portfolio valuations, some LPs harbor doubts whether PE can continue to generate attractive long-term returns given the high prices paid for assets acquired in the early stages of the recovery.

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Some LPs have learned from hard experience that most PE funds can lay claim to top-quartile performance by selecting the benchmark that makes them look best.

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Such companies are highly attractive to other PE firms that can bring their unique capabilities to bear to realize that yet-untapped potential.

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Therefore with the shares trading at about a 10x PE multiple the company can essentially create a 10% return on the money when it buys back shares while only losing 1% in interest.

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Verifiable returns: LPs are deepening their analysis to ensure that they can verify true PE returns.

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And limited holding periods can trigger the sale of a PE-backed company that still has the potential for significant upside gains.

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They get the net operating loss carry-forwards and they know they can sell the home and handset businesses to foreign buyers or PE.

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The question now for investors is whether Kors can continue that kind of growth in both stock price and earnings, justifying its PE ratio for the trailing 12 months, which currently stands at nearly 40.

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With a PE multiple of 18x before the slide in the pre-market, almost no earnings growth (currency can impact this) and guidance below expectations the shares should be under pressure until there is more clarity and a return to growth.

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