CEPRES is an online investment platform and can best be thought of as a global data network between GPs and LPs. The platform gives institutional investors a way to effectively benchmark private capital market investments, using technical and fundamental analysis to achieve a three dimensional view into their investments.
“We have approximately 1,000 LPs exchanging data about today 4,500 funds and it is strongly growing every month” says Dr Daniel Schmidt, CEO of CEPRES. “Based on that data network, which covers all private capital strategies, we offer tools for different use cases.
“Those use cases start with market research, where we utilise data on 46,000 portfolio companies which have a combined enterprise value of USD16 trillion. All of this data allows us to rebuild the market at the fund level and portfolio company level, showing not only fund returns but also the risks and operations of companies.”
The second use case for investors is to use the data exchanged with a GP to help with their due diligence process. The GP keeps control regarding all confidentiality demands.
The third use case is portfolio monitoring and reporting. Data exchange allows LPs to aggregate data from the single GPs they invest in to do portfolio monitoring. PE.Analyzer is the first benchmarking platform of its kind. It allows deeper transparency because it is under the GP full control; a win-win situation for GPs and LPs.
“We have an extensive toolset to make it easy to access and analyse fund information. PE.Analyzer is built around the work we do on portfolio construction, asset allocation optimisation and cash flow forecasting. We work with large institutions companies on their asset allocation programmes and help them to forecast what the future cash flows would be for their portfolios.
“We think PE.Analyzer will be the next logical step in the development of the private capital markets,” says Schmidt.
Benchmarking is useful for both due diligence and for ongoing portfolio monitoring. As it sits beneath the world’s largest private fund dataset, this allows it to not only provide benchmarking at the fund level but also at the operational level to benchmark individual GPs against margins, operational costs, leverage levels, etc.
This ability to benchmark GPs deals could be an important enhancement and whilst Schmidt doesn’t think it will change the way that people think about why they should invest, it should give them greater efficiency. They will be able to perform analysis on a much wider range of GPs in a much shorter timeframe.
“By invitation of the GPs, one can do a single GP analysis and compare it against a pool of 50 other GPs or against the complete market in the same time it would have taken to analyse one GP in the past. We always make sure the confidentiality of that data is protected at all times,” stresses Schmidt.
Over the last 12 months, the number of LPs using CEPRES has grown from 600 to 1,000. The total enterprise value of portfolio companies has grown fourfold, from USD4 trillion to USD16 trillion.
From a GP use case perspective, managers can use CEPRES to better understand LPs and how they are perceived, in terms of strengths and weaknesses; a useful insight when fund raising.
“Exchanging data with LPs builds confidence and it helps GPs by knowing exactly what their position is in the market,” says Schmidt.
On winning this year’s award, he comments: “A lot of ILPA and AIC members use our software and we are getting a lot of positive feedback so winning the award is a great honour.”
