Investors have long complained about the difficulty of finding objective ways to measure performance in the often opaque world of alternative investments. Pevara, a new GP benchmarking firm, is looking for a piece of the action in a marketplace that is beginning to look a little bit crowded.
The company, a unit of eFront, a Paris-based investment benchmarking firm founded in 1999, offers an online, hosted performance management tool, said Jeremy Hocter, product manager for the company. Pevara begins its launch tour on Tuesday, November 1 in New York, featuring networking and roundtable discussions with limited partners.
“We’ve taken a lot of time to build the interface,” Hocter said. “We want to make it as simple and easy to use as possible.”
A number of other data providers have tried for years to track private equity fund performance, and although a growing number of LPs, such as state pension funds, now disclose data on the performance of alternative portfolios, authoritative standards remain elusive. As Erik R. Hirsch, chief investment officer of
Companies such as Thomson Reuters, the publisher of Buyouts, and Cambridge Associates do track fund performance, and Josh Lerner, a professor at Harvard Business School, launched an effort early this year to gather fund performance data for an academic project, the Private Capital Research Institute. The Burgiss Group, a Hoboken, N.J.-based developer of software for portfolio managers, introduced a service in April 2010 called Private iQ to let LPs their performance against that of a database of thousands of funds.
Pevara sees Private iQ as its most direct competitor, Hocter said. Both systems offer Software as a Service, providing online access to users over a secure Internet connection. Pevara, with about 3,000 funds in its database initially, draws on two sources of data: publicly disclosed financial returns and client portfolio data, Hocter said.
Although it is designed to be a global database, Pevara puts its primary focus on the United States, because of its more developed private equity marketplace, Hocter said. The database covers the range of private equity, from early-stage venture funds to mature buyout strategies. The company plans to expand later into other asset classes, including infrastructure, real estate and oil and gas funds.
The online tool will provide users with the advantages of dynamic data access and analysis tools, showing fund quartiles, J-curves, and it will filter a peer group according to a variety of criteria: size of fund, vintage year, region, strategy, currency, active versus liquidated funds and so on. A user can filter, for instance, for 2003 North American distressed capital funds, Hocter said. “You can change how you want your fund benchmarked.”
Users can customize the interface depending on their roles in the investing group, Hocter said. “A manager would have a different experience from the analyst who set it up for him.”
Cost depends on the size of the client and the number of funds. Hocter said the service would be useful to all kinds of investors, from the smallest single-family office to sovereign wealth funds.
Hocter said. “We want users to get the benefits from this.”
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