Beta Risk Solved by FinTech Company
NEW YORK, Jan. 28, 2016 /PRNewswire/ -- CEPRES today released details of their new FinTech platform, PE.Analyzer, that now calculates beta risk of Private Equity markets for the first time. By measuring individual beta of Private Equity investments to public markets, the platform calculates risk-adjusted alpha for specific strategies and sectors - something never before available for Private Equity investors and fund managers.
- Alpha for Private Equity strategies varies typically between 5 and 15 versus comparative public markets
- Buyouts typically exhibit beta between 1 and 2.5
- Private Debt typically exhibits beta between -0.5 and 1
- For private equity funds, whole portfolios and investee companies
- Guides how to protect private equity portfolios against market shocks
- Manages risk for investment due diligence
- Significant enhancement to existing IRR, PME, PME+ and alpha
"With current Global Markets at their most volatile in years, beta risk outweighs alpha generation as an influencer of final investment outcomes. Previous analysis of alpha assumed a beta correlation of 1 for Private Equity, which research proves is incorrect. Without the beta analysis we introduced today, an investor could make false assumptions resulting in unexpected losses – as happened for many investors in private equity during the 2008 credit crisis."
Dr. Daniel Schmidt – CEO, CEPRES GmbH
About PE.Analyzer Alpha & Beta Analysis
CEPRES PE.Analyzer delivers the deepest analysis of market transactions, investment portfolios and fund manager track records to the desk of investors and fund managers. The new alpha & beta capability implements leading scientific portfolio theory as a practical SaaS solution. For the first time it is possible to evaluate the true risk/return profile of private equity compared to specific markets and underwrite investment decision on an evidential basis. Details of the scientific methodology are available on request.
CEPRES is an innovative FinTech company providing an online, SaaS investment decision platform to invest in Private Equity with the proficiency of Financial Markets. Decision makers of investors and fund managers gain deep insights on their performance and risk correlations to forecast investment outcomes and underwrite investment decisions that drive better returns. In the last 10 years $1.5 trillion of due diligence and asset allocation have been conducted through the CEPRES platform. For further information visit www.cepres.com.
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