1. PRIVATE EQUITY ANALYTICS

Traditional methods fail to accurately capture total performance and reliable risk measure. PERACS Analytics offer solutions and a new way forward for investors.

IRR and PME suffer inherent aberrations due to cash flow timing and reinvestment assumption.

Traditional IRR and Multiple measures no longer reliably identify performance persistence.

Variance- and beta-based measures struggle to provide meaningful PE risk insight:

  • PERACS Alpha corrects issues with IRR methodology and incorporates stock-market opportunity cost
  • PERACS Alpha effective in capturing persistence and may improve portfolio performance by up to 450 BPs p.a.
  • PERACS Risk Curve and Coefficient complete the risk-reward perspective to be integrated in risk benchmarking and risk allocation

These flaws crystalize the need for a new track record evaluation paradigm.

Value Attribution methods are customized with long and complex explanation footnotes

Being Top Quartile by IRR in a given vintage year becomes less and less meaningful:

  • 1 in 5 funds mis-quartiled by IRR bias
  • Vintage year benchmarks often group funds with very different investment focus
  • Vintages do not account for reality of funds from consecutive vintages compete for similar deals
  • PERACS Value Driver Bridge standardizes attribution analysis to identify how GPs generate Alpha through operational and financial drivers
  • PERACS Relevant Peer Group provides objective benchmarking through algorithmic methods driven by actual deal activity for truer comparison across managers

2. GENERAL PARTNERS

GPs use PERACS to understand and analytically showcase their unique DNA of value creation and enhance fundraising effectiveness and efficiency.

Benefits for GPs:

  • Crystalize competitive positioning
  • Ongoing investor communication
  • Evaluate and manage deals through an Alpha perspective

The PERACS analysis helps GPs:

  • Provide their LPs with reliable and credible metrics on key attributes of their track record and strategic positioning /differentiation
  • Objectively understand their own value creation approach as a starting point for best practice transfer and as input for their future strategic positioning
    • PERACS analyses have been featured in AGM Presentations, in PPMs and in Due Diligence Data Rooms

PERACS GP Clients represent more than 20% of global private equity fundraising volume with announced Fund Closings exceeding USD 70B

3. LIMITED PARTNERS

PERACS provides LPs with a unique perspective into portfolio risk and return profile with applications in portfolio design, investment decision support and performance optimization.

Benefits for LPs

  • Provide unique perspective into returns and risk
  • Optimizing performance and portfolio design
  • Make new investment decisions
  • Resources optimization

The PERACS analysis helps LPs:

  • Evaluate and better understand the risk and return profile of their existing private equity portfolio as a possible input to future portfolio design decisions; and
  • Optimize the due diligence process to
    • (a) analyse a potential new primary fund commitments to either help back-up parts of the qualitative story with quantitative analysis or further question a GP with some of the findings
    • (b) compare the risk, return, and competitive positioning of competing GPs being investigated concurrently

Over 1,000 funds have been analyzed by PERACS on behalf of some of the largest LPs.