About eFront VaR

The private equity industry has lacked tailored methods and data to provide true insight into value-at-risk, with available approaches borrowed from other asset classes not entirely suitable to private equity. Built in partnership with leading academic research, eFront VaR is the first ever product to address these issues through simulated NAV and cash flow scenarios using a proprietary bottom-up value-at-risk model for single deals and funds. Leverage eFront VaR’s bottom-up simulation and granular data to turn risk management into a value enhancing strategy.

Today’s Top Risk Management Challenges

Regulatory Compliance

LPs face increasing regulatory pressure to provide reliable and accurate VaR measurements.

Data Availability

Stand-alone private equity funds cannot apply public market methodologies because of scarcity of alternative investment data.

Accuracy

Common approaches to VaR measurement result in overstatement of volatility and correlation due to the use of unrepresentative proxies.

Value Generation

Existing methodologies computed from fund level information provide limited insights into risk-return relationships and risk management.

Manager Specific Assessments

Available VaR software and methodologies do not reliably assess and compare the risk of different fund managers.

Relevance

Commonly available measurement techniques struggle to accommodate private equity’s specific characteristics.

Key Product Features

Rigorous Bottom-Up VaR Calculation

Built in partnership with leading academic research, eFront VaR is the first ever product to simulate NAV and cash flow scenarios using a proprietary bottom-up VaR model for single deals and funds, thus eliminating the need for proxies and old aggregated data and thereby promoting greater reliability and accuracy of measurements.

Granular Data

Leverage a comprehensive database containing thousands of transactions since 2000 with detailed information on CF and NAV values, featuring an accurate representation of growth and recession stages.

Intuitive VaR Measurement and Display

eFront VaR features a Monte Carlo Simulation of roughly 10,000 draws based on a pre imported data set of over 100,000 movements, with results summarized in an easy to read histogram.

Tailored Scenario Analysis

eFront’s VaR software allows LPs to feed in their underlying portfolio data, including specific fields such as deal type, sector, age, and performance to date, resulting in realistic scenarios and distribution ranges that they can use to inform investment strategy and portfolio design decisions, such as the impact of making new commitments, secondary transactions and so on.

Portfolio Optimization

Compare the risk-return perspective of investments taking into consideration the deal stage, industry, and size in order to optimize your portfolio and risk management through an in-depth understanding of which investments are the main VaR drivers.

How will eFront VaR impact your alternative investment risk management?

Greater Confidence
Boosted Transparency
Enhanced Decision Making
Time Savings
Streamlined Compliance
24/7 Support
Dramatically enhance the accuracy of estimates for specific portfolios through VaR calculations based on the particular characteristics of your underlying portfolio. Leverage eFront VaR’s granular dataset containing 6000+ transactions and 3000+ deals in order to eliminate the need for proxies or reliance on old aggregated data. With specific treatment for industry segments and deal size, the data from eFront VaR greatly enhances the accuracy of VaR measurements with regards to your specific investments.
With eFront VaR you can drill down to individual VaR assessments in order to better understand the contributions of your investments at a granular level in the overall VaR and highlight drivers. Optimize your portfolio to account for risk exposure at a deal level thanks to eFront’s dedicated VaR software.
eFront’s VaR software enables limited partners to feed their own private equity data into a ready-made simulation in order to provide meaningful probability distributions for a portfolio’s NAV evolution and cash positions over time. Scenario distributions provide meaningful actionable data on which to base investment tactics.
eFront VaR was designed with ease of use in mind. With only 1-2 days required to deploy, you can get up and running quickly. Thanks to eFront VaR’s out of the box dataset consolidated from several reliable sources, you can jump right into high value added tasks without worrying about data. Utilize eFront VaR’s pre built simulations to effortlessly conduct in depth analysis on your private equity investments.
eFront VaR was designed with regulatory requirements and private equity industry standards in mind. It was developed by building upon standard VaR measurement practices and tailoring them to the private equity industry. eFront’s VaR software will help you quickly and easily satisfy compliance requirements with Invest Europe and BCVA as well as meet standards set by Basel III, Solvency II, Supervision for pension funds, AIFMD, and others.
Leverage eFront’s worldwide professional services and support teams anytime from anywhere.

Key Stats

1-2
Days to get the system up and running
10,000
Random draws for each VaR calculation
8
Customizable dimensions
100,000
Transaction movements in the underlying database, and growing

Download the Brochure

Contact Us