Independent performance calculations

Using Pevara to calculate invested fund performance and returns provides an independent and consistent view of private equity performance, reducing your organization’s reliance on GP presentations and external advisors. read more...

A closer look at venture capital returns (1/2)

A closer look at venture capital returns (1/2)

The term "bubble" does not typically cause alarm. At least, it doesn't do so when used outside the world of finance and investing. The term generally conjures scenes of tranquility; bubbles rise gently through water and burst harmlessly on its surface. For investors, though, bubbles are a very different and often troubling matter. The more ominous synonyms for the term, like correction, contraction and crash (no one wants to crash anything or be in a crash!) make the preference for "bubble" clear. But, it's all really the same: the surge in prices of particular commodities, assets, or securities that continues until confidence in the trend ceases, resulting in a precipitous selloff that bursts the bubble. History tells us that bubbles tend to follow human nature and may be impossible to prevent. However, we may be able to predict them with advanced tools like Pevara.

 

In this Issue of Front Line, we present the first of a two-part series that will explore the possibility of a venture capital bubble within venture capital (VC) sector of the alternative assets market. Although VC is an enormous and complex business, making any predictive analysis a daunting task at best, the capabilities within Pevara can make such analyses uniquely revealing. Part one of our exploration looks at geographical factors that may be at work. Part two will explore performance cycles for predictive insights.

 

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Assessing risks in private equity (2/2)

This is the second of two newsletter issues that explore and compare different methods of measuring risk. All of them have their strengths and limitations and none of them are individually capable of providing all of the insight needed by limited partners to perform an adequate assessment of risk-for a portfolio or for fund managers. Naturally, all methods require data, the quantity and quality of which can spell the difference between insight and ignorance.

 

Last month, we looked at the benefits and limitations of the standard deviation and found that while it revealed much about the distribution of returns, it offered almost no insight into loss assessment. In this issue, we look at histograms as a tool for assessing loss. Ultimately, each method tells its own story and it is up to the individual LP to weave the various stories into a single coherent picture.

 

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Assessing risks in private equity (1/2)

Risk is a recurring theme in this newsletter, just as it is in so many discussions of private equity investing. Investors and managers all seek to maximize returns and minimize risk. In a previous issue, we identified some of the key risks and began to differentiate the perception of those risks from their realities.

 

In this issue, the first of two on the subject, we begin a discussion of specific risk assessment methodologies. The importance of understanding and measuring risk cannot be underestimated, since the consequences of overstating risk and underestimating it are often the same: lost returns. The great Renaissance artist Michelangelo might as well have been talking about private equity when he said "The greatest risk to man is not that he aims too high and misses, but that he aims too low and hits."

 

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Benchmarking the Benchmark

Benchmarking is an ancient practice, going at least as far back as the ancient Egyptians, who used a fixed reference point from which buildings and parcels of land were measured. Simply put, it was, and remains, a standard against which all manner of things can be measured. Beginning in the 1970s, its meaning broadened to include performance measuring in business and technology. Since then, benchmarks have come into wide use by investors and managers of alternative asset funds to gauge both human and financial performance.

 

The big question, however, is how to determine the merit of a fixed standard, or benchmark? How does one benchmark a benchmark? This edition of Front Line explores that question in detail as it pertains to assessing private equity funds and GPs. As you'll see, not all benchmarks are created equal.

 

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Secondary investments: an obvious choice

Secondaries are very popular and are even trading at a premium. But, might they be too good to be true? Pevara might just be the ideal tool for sorting out all the myths and truths about secondaries, and in this edition of Front Line, we'll see what insight and clarity Pevara can offer on this topic.

 

To all our readers, please send us your ideas for interesting topics and future articles. Tell us what's most important to you. As previously mentionned, we want to make this process easy and convenient. So, we've established a new email account exclusively for this purpose. Send your ideas, suggestions and requests to This email address is being protected from spambots. You need JavaScript enabled to view it. .

 

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Beyond returns: the delicate question of risk in private equity

There is risk everywhere in our lives and in every one of our business and investment endeavors. The world of alternative investment is no exception. But, as we'll see in this edition of Front Line, private equity has very specific risks, but is also affected by macroeconomic factors, as are all investments. Assessing and mitigating alternative investment risk requires good information and advanced analysis, both of which, fortunately, are hallmarks of Pevara. This edition will explore some of these risks, attempt to sort out their causes and offer suggestions for assessment.

 

Download The Front Line newsletter: Beyond returns - the delicate question of risk in private equity