CEPRES RESOURCES

“Private means private.” Private equity managers are not required to publicly disclose much information about their finances and investment track records. That means LPs must ask those GPs for their financial and performance data in order to conduct due diligence. However, the information provided can feel more like marketing materials designed to entice an investment rather than an in-depth, transparent record that an LP can rely on to make an informed investment decision. For example, some funds provide historical performance data to potential investors, but only for the top quartile of their investment portfolio. Misleading marketing and metrics are a growing concern for U.S. regulators, but many LPs continue to rely on cherry-picked, incomplete data to make investment decisions, thus increasing their risk profiles. Investors that want to dig deeper or verify GP-provided reports will need to further mechanized their private equity data and analysis.

LPs may look to third-party providers of private market data to bolster their private equity fund due diligence efforts. However, some data sources are more accurate and actionable than others. Some providers offer financial performance data scraped from the typically limited, summary-level information available publicly or provided by GPs. In addition, some data sets may be too small for investors to be confident in their accuracy. When assessing a third-party private equity data provider, investors should demand that data be primary-sourced – meaning ingested directly from GP track records – not scraped from GP pitch books or elsewhere online. The best profile of a GP’s track record includes actual underlying cash flows of the GP’s investments – not only the high-level metrics showing overall fund performance. Investors can access those types of high-quality, actionable data and insights with CEPRES. We offer clients the most accurate, actionable, and granular data – sourced directly from GPs on your behalf. Related article: CEPRES private market data coverage eclipses 10,000 funds & 100,000 PE-backed companies.

Private equity due diligence is often a manual and time-consuming process. Approximately half of LPs spend more than six months researching and selecting a fund manager, with a small number taking as long as three years to complete that process. Investors are increasingly looking to technology to make their due diligence processes faster and more efficient and ultimately ensure the right decision is made. CEPRES Due Diligence speeds up quantitative analysis, which includes analyzing historical investment track records to uncover patterns and drivers of risks and returns represented by a GP’s previous investments across multiple funds and market cycles. With CEPRES, those months turn to minutes. Investors can analyze more track records with better confidence to ensure they drive better investment outcomes.