СEPRES, a New York based fintech company, has unveiled a new release of PE.Analyzer, a software platform that now also calculates beta risk of private equity markets, something never before available for investors and fund managers.

Christopher Godfrey, Partner at CEPRES, said: “We combine a level of scientific portfolio theory together with a more pragmatic approach. We help institutional investors to understand how the markets behave and correlate to their private equity investments and help them with their due diligence.”

The CEPRES platform focuses on illiquid assets: buyout, growth, venture, private debt, infrastructure and real estate.

“We are neutral to location in a sense that we can perform an analysis for any market. Africa is still a nascent market for private equity, and it’s quite early in a cycle, which is obviously a great opportunity,” Godfrey told Africa Global Funds.

“There is a lot of turbulence in the developed markets, and Africa is not so heavily coupled with the other markets in the world,” he added.

By measuring individual beta of private equity investments to public markets, the platform calculates risk-adjusted alpha for specific strategies, sectors and fund managers.

Godfrey said that previous analysis of performance assumed a beta correlation of 1 for private equity, which research proves is incorrect.

“We provide the same types of quantitative, fundamental and technical analysis for illiquid markets that people are familiar with for the traditional markets,” he said.

PE.Analyzer delivers meaningful metrics to help make better evaluation of global private market strategies and optimize portfolio strategies.

“We use a combination of the fund information and the deal information – including individual cash flows and characteristics of the transactions and operating metrics of the companies,” said Godfrey.

Godfrey gave an example of an investment in a communications company in an African country with a certain type of financing.

“There will be relative markets that you can measure that against and see how the cash flows and financing of that investment and the cash flow back from that investment have behaved versus a comparative market,” he explained.

“When you look at only one investment there’s not enough statistical data to deduce a cause and effect, but when you can do that across a number of investments, you can measure the statistical correlation and come to conclusion about the actual relationship,” he added.

CEPRES encompasses a network connecting buy- and sell-side market participants.

Without disclosing any names, Godfrey said: “We have clients investing in Africa, and we have some fund managers from Africa.”

“Overall for the global market we have around $1.5trn of capital within our primary scope of analysis for our clients. Africa is very small part of that today just because it’s a nascent market for private equity,” he added.