Year End Message + View Towards 2016: Oliver Gottschalg

As the year comes to an end, I would like to share with all of PERACS’ clients, users, friends and supporters a brief synopsis of the key business developments over the past twelve months; along with a strategic outlook into 2016.

The PERACS idea was born in 2011, we saw proof of concept for our services in 2012, the business reached seven digits in revenues in 2013, and we celebrated the 1,000th PERACS PE fund analysis in 2014. Building on this momentum, 2015 brought further great developments in a number of key areas.

First and foremost, we further expanded the number of GPs we serve around the world. It was most encouraging to see that in a hot fundraising environment, we had the privilege of working with some of those GPs with the fastest and most successful fundraising of the year. PERACS was particularly successful in winning new engagements and expanding existing ones in the French PE Market, where we now have a respectable market share among the “brand name” GPs. We are excited to observe how the widespread use of “PERACS numbers” will influence French-focused LPs’ analytics in the coming months.

The further increase in LP usage of our services was another positive sign. We continue to serve LPs by applying PERACS metrics to their existing portfolio and we support them with our analysis in the fund due diligence and fund selection processes. It was most encouraging to hear from new PERACS GP clients that major LPs are asking them about a PERACS number; even before getting to the PERACS section in the pitchbook.

These positive developments on the business side are a clear result of the expanded range of services that we offer.

  • The PERACS Alpha Benchmark Report, derived by PERACS from detailed cash flow information provided by preqin, equips the PE industry with a useful reference point to assess private equity funds according to the powerful PERACS Alpha measure on a quarterly basis. PERACS Alpha quartiling has become increasingly relevant for LPs as it allows them to identify likely future outperformers based on a performance measure that (unlike IRR) still shows performance persistence.
  • PERACS has honed its ability to generate up to half of the PERACS metrics on thousands of PE funds around the world based on commercially sourced 3rd party data; known as the PERACS Competition Radar. This makes it possible to gain key insights into the “how much” and into the “how” of value creation of these funds, without any need to source data directly from the GPs and hence independent of where these are in the fundraising cycle. This possibility has proven to be of great interest to LPs who want to map out the competitive landscape of one distinct area in PE, as an entry point for LP fund selection, but also for GPs who want to gain insights into their competitors or who are curious to see how their own track record looks based on commercially available 3rd party data.

2015 has also been a year of important milestones with respect to the strategic partnerships into which PERACS has entered. We forged strategic partnerships with placement agents, where we are able to support primarily in the origination stage and in their own deep due diligence on GPs with whom they (intend to) work. We expect these relationships to expand in quantity and intensity in 2016. The second strategic development was with data providers. We were proud to see the PERACS Alpha move onto the Bloomberg Terminal and to see the PERACS Risk Curve featured in a recent Bloomberg PE Brief. Similarly, our longstanding relationship with preqin is expanding and led to a first PERACS product now available on the preqin website … and the pipeline towards 2016 is full of additional project with these two partners and other key players in the PE universe.

At the same time we continued to invest massively in industry awareness and adoption, be it through media coverage, our sponsorship of and presence at major industry events around the world or through the overhaul of and the recent creation of a regular newsletter with subscribers already in the triple digits as of today.

Obviously, all these developments and growth areas require additional internal and external resources and we continue to expand the team to be able to service our clients globally. Most notably, Kathy Jeramaz-Larson, who left the Institutional Limited Partners Association June 30th, 2015 and who has been a part of the PERACS Advisory team for the past 3 years, will continue in that capacity. Her operational expertise, her global networks, and her entrepreneurshipare positive contributors to PERACS growth strategy.

Most encouraged by all of this momentum we look into 2016 with optimism. We at PERACS wish you a peaceful Holiday Season and all the best for the New Year.

Oliver Gottschalg

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