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Fund performance analytics

MJ Hudson fund performance analytics is a leading provider of quantitative analytics for the private equity industry.

We help investors achieve a better understanding of the value drivers behind private equity investments and, subsequently, to make better investment decisions. MJ Hudson offers specialised consulting services to institutional and other sophisticated investors by providing detailed insights into the key aspects of private equity investment performance.

Our mission is to enhance the efficiency of fundraising and fund due diligence processes and to help free up costly time for investor relations and due diligence teams.

To learn more about how our PERACS Calculator can improve your analytics, click here.

What we do
Bespoke analytics

Leveraging 20 years of experience, we perform bespoke analytics in various areas involvimg risk and return of the PE asset class.

We have ample experience in various areas of research and analytics related to risk and return of the PE asset class and have the team to perform bespoke analysis for clients in an efficient way that leverages most recent insights from academic research. We look forward to your requests.

Bottom-up value at risk analysis

First ever bottom-up value at risk model that models risk at the level of the underlying assets based on insights gained during research projects with partners ranging from large LPs to industry bodies to DFCs.

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, our value at work model 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 that captures systematic risk factors related to debt markets and public and private equity markets. Leverage MJ Hudson's VaR’s bottom-up simulation and granular data to turn risk management into a value enhancing strategy.

Cash flow forecasting and liquidity placing

Helping investors make more accurate predictions of the expected positive and negative cash flows from their private equity investments and, ultimately, allow a more precise commitment pacing to maximize the efficiency at which the portfolio puts capital "to work".

The private equity industry has lacked tailored methods and data to provide true insight into value-at-risk, with advanced cash flow forecasting and commitment pacing module leverages insights from data on 20+ years of historic PE cash flows derived through proprietary machine learning techniques to determine the likely cash flows from a given PE fund in your portfolio with unparalleled accuracy. The model makes it possible to integrate assumptions about the likely evolution of debt and equity markets into the analysis. It determines the cash trajectory of each fund to then aggregate the information to provide portfolio level predication and bands of expected liquidity on a quarterly or annual basis.

PERACS exit performance analytics

A unique solution to corroborate the quality of your investment strategy outside of the typical fundraising communications cycle.

An exit is an opportunity to show the quality of your investment and value creation strategies. LPs are inundated with exit announcements that rely on metrics they no longer trust. Yours need to work harder if they are to stand out and be effective.

MJ Hudson Exit Performance Analytics helps GPs prove the strategy and skill that has delivered a successful exit. Our tools demonstrate:

SKILL-DRIVEN RETURNS
independent of other performance factors like sector or geographic focus, economic cycles, size, and allowing them to quantify the genuine alpha;

STRATEGIC DISTINCTIVENESS
by measuring the extent of specialist versus mainstream exposure, enabling them to replace the word, “unique” with empirically validated data that can be tracked over time;

DEAL-FOCUSED METRICS
our analysis can show how a specific deal sits within the investment strategy and how returns compare to other similar investments, at the deal level, and public market equivalents; and

PERFORMANCE CONTRIBUTION
traditional exit analysis focusses on company metrics, rather than the contribution of the deal to investor returns. Our tools bring the focus back to what the exit means for investors.

PERACS GP competition profiles

Helping GPs understand how they are being viewed in the market and the ability to run competitive analysis on quantitative performance and positioning metrics.

Access to a library of c.500 Private Equity GP profiles where MJ Hudson using publicly available data runs the PERACS analysis, which are updated on a quarterly basis. The GP profiles help GPs firstly understand how investors are viewing their performance based on available data, alongside letting them evaluate and better understand the risk and return profiles of their competition with use of our quantitative analysis and ability to compare metrics and run competitive positioning analysis.

PERACS GP profiles and fund screening

Helping investors achieve a better understanding of the value drivers behind their private equity investments and, subsequently, to make better investment decisions.

Access to a library of c.500 Private Equity GP profiles where MJ Hudson using publicly available data runs the PERACS analysis, which are updated on a quarterly basis. The GP profiles help investors evaluate and better understand the risk and return profiles of their existing private equity portfolio and optimise their due diligence process with use of our quantitative analysis and ability to compare metrics and run competitive positioning analysis.

Alongside this MJ Hudson has developed a new tool for Limited Partners that can be used on their own internal systems, to calculate two key MJ Hudson PERACS metrics: performance measurement and the risk profile.
The key metrics included in the MJ Hudson PERACS Calculator for Limited Partners includes performance measurement and the risk profile:

  • performance (MJ Hudson PERACS Alpha and MJ Hudson PERACS rate of return)
    • Public-Market Equivalent (PME) benchmarking perspective
    • enhanced performance measurement, avoiding issues with IRR methodology
    • comparison to benchmarks
  • risk profile (MJ Hudson PERACS risk curve)
    • assessment of portfolio risk based on historical return distribution across the portfolio
    • graphical representation based on intuitive curve inspired by “Lorenz Curve”
    • comparison to benchmarks

To learn more about how our PERACS Calculator can improve your analytics, click here.

PERACS metrics analysis

Providing insights into performance, risk and strategy using smart data to enhance fundraising and fund selection effectiveness.

MJ Hudson Fund Performance Analytics helps managers and investors go beyond IRR. Through data analytics,
we deconstruct value creation, to identify the true drivers of GP's track record, including demonstrating:

SKILL-DRIVEN RETURNS
independent of other performance factors like sector or geographic focus, economic cycles, size, and allowing them to quantify the genuine alpha;

STRATEGIC DISTINCTIVENESS
by measuring the extent of specialist versus mainstream exposure, help determine what is “unique” with empirically validated data that can be tracked over time;

PEER DIFFERENTIATION
isolating the core characteristics that define a GP’s deal DNA to identify and score relative performance against a truly relevant competitor set; and

TRACK RECORD REPEATABILITY
providing an objective indicator of the likelihood that past performance really could be an indicator of future results.

To learn more about how our PERACS Calculator can improve your analytics, click here.

PERACS year-on-year analysis

Providing insights into performance, risk and strategy using smart data to enhance annual investor reporting.

This analysis leverages the POWER of the PERACS Metrics to provide specific insights into how a GP's portfolio evolved over a 12-month period. This includes an assessment of value build-up (and its sources), as well as a comparison of year-on-year progress to competitors and broader benchmarks, features an assessment of how recent deals influence strategic positioning and what the risk profile was of the various components. This analysis is performed for the overall portfolio and then separately for exits versus new deals.

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Our thinking

This ranking lists the world’s top private equity fund of funds in terms of aggregate performance, based on their funds raised between 2008 and 2017.
Benchmarking reports
2021 HEC Paris-Dow Jones Private Equity Fund of Funds Performance Ranking
This report provides detailed analysis of MJ Hudson PERACS performance metrics by regions, fund type and vintages across all private equity funds.
Benchmarking reports
Fund Performance Benchmarking Quarterly Report
video
PERACS | accurately measure alpha in PE fund performance
We help investors make better decisions with improved understanding of the value drivers behind private equity investments. Our specialized consulting provides detailed insights into the key aspects of private equity investment performance.
video
Fund performance analytics explained | Oliver Gottschalg
Oliver’s research focuses on the strategic logic and the performance determinants of private equity investments. A second stream of work looks at the implications of employee motivation for firm performance in different settings.
We interviewed Oliver Gottschalg, founder of MJ Hudson Fund performance analytics to discuss LPs, portfolios, credit lines and more.
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