LPs offered custom-made benchmarks

Pevara has unveiled what it claims is a first-of-its-kind benchmarking tool that allows LPs to evaluate investments based on their portfolio’s bespoke strategy, region and vintage year.

Pevara has created a software tool that allows LPs to evaluate fund commitments against a benchmark mirroring the exact mix of strategies, regions, vintages and asset allocation to their own private equity portfolio.

A custom weighted benchmark eliminates LPs’ reliance on “imprecise and general benchmarks that fail to represent the composition of their own investments”, said Pevara, which bases its software as a service (SaaS) product on technology developed by software provider eFront. Users can generate benchmarks on their entire portfolio or specific investments in evaluating performance. 

Private equity researcher Oliver Gottschalg of the Paris-based HEC School of Management praised the tool as allowing LPs to demonstrate more easily how decisions were made and monitored to investment committees. “This has led to the examination of operational processes at LPs to ensure maximum value is delivered back to their stakeholder.”

In reaction to the custom benchmarking tool, one EU-based LP said the product would be of valuable use so long as the universe of funds benchmarked against was sufficiently large enough to capture a diverse range of strategies and geographical exposure within a private equity portfolio. 

A Pevara spokesperson said the group’s database includes some 3,000 funds.