Wednesday, January 15, 2014

Private Equity Navigator: Private equity analysis from Pevara & INSEAD’s Global Private Equity Initiative

http://centres.insead.edu/global-private-equity-initiative/research-publications/documents/PrivateEquityNavigator_Dec2013.pdf
PRAHL Michael, ZEISBERGER Claudia
Read the report
INSEAD, PEVARA (2013)

quarterly publication in conjunction with PEVARA, a unique data set based on deal data from institutional investors.

As a result of our research activities and engagement with industry players and students in the classroom, we regularly encounter requests for data on activity and performance in the private equity industry. In the absence of a standard index for this asset class, we suggest various sources, each with its own pros and cons. However, different sources work with different sets of data, making it difficult to compare performance without access to the underlying fund and transaction data. It is therefore in pursuit of the clarity that so often eludes practitioners, industry observers and academics that we are launching the quarterly INSEAD–Pevara Private Equity Navigator. What sets this report apart is the combination of independent academic leadership and a unique dataset derived entirely from cash flows reported by limited partners (LPs). The selection and interpretation of data is carried out by the Global Private Equity Initiative (GPEI) at INSEAD, while the data is provided by Pevara, the performance monitoring module of eFront, a leading financial analysis solution for alternative investments. Thanks to this joint initiative, we will provide a stream of unbiased observations on a quarterly basis. We will report and interpret key metrics, and illustrate the real life challenges of investing in private equity by tracking unique hypothetical LP portfolios based on actual underlying funds. The Private Equity Navigator is a reference tool for practitioners and academics, designed to stimulate further discussion and research, as well as to create enhanced transparency for this asset class, and thereby contribute to better allocation decisions.