eFront VaR – revolution in private equity risk management

eFronteFront VaR – revolution in private equity risk management



June 1 , 2017 | Posted by eFront Solutions |

eFront VaR – revolution in private equity risk management

Paris | June 1, 2017 – eFront today announces a revolution in private equity risk management, with the launch of eFront VaR, an off-the-shelf product for private equity limited partners.

eFront VaR, which has been developed in partnership with PERACS Analytics, uses a bottom-up simulation based on granular historical transaction level data to provide actionable scenario distributions.

The product is in sharp contrast to existing top-down approaches that are of limited practical use and that tend to draw on data that is both non-specific and out-of-date.
eFront VaR accommodates not only the illiquid nature of private equity fund interests, but also takes into account an LP’s specific underlying exposures. This dramatically enhances the accuracy of estimates for specific portfolios, and so makes regular risk monitoring a meaningful and achievable exercise.

LP investment teams can also use the scenario results to demonstrate and benchmark their skills at building balanced portfolios with better than average risk attributes.
eFront VaR is now available as a specific module within eFront Navigator, eFront’s product dedicated to LPs for their data analytics needs and decision support.

Olivier Dellenbach, CEO of eFront, said: “eFront VaR has the potential to turn LP risk management functions into a genuine value creation centre. By providing rich, actionable information that can be used for live tactical decision-making. This truly is a quantum leap in private equity risk management.”

Professor Oliver Gottschalg of HEC Paris, founder of PERACS, said: “Gaining a more sophisticated view of risk is the holy grail of private equity fund teams. The peculiarities of LP investing means that generic risk solutions are of limited value. eFront VaR is an indispensable tool, allowing us to plug in our own unique portfolio information and providing scenarios that can inform strategy, not just compliance and reporting.”