Matthew Hook
Manager, Strategic Advisory
Client Quote
“As the private equity secondaries market continues to grow in size and sophistication, the ability to process vast amounts of information with accelerating pace is critical. In this context, traditional spreadsheets lack the computational power and ability to support multiple simultaneous users running complex analysis required in the market today. Lionpoint helped us design robust tools in the Anaplan environment, providing a flexible platform that greatly improves the speed and accuracy of our secondaries underwriting.”
Background
Partners Group is a leading global private markets firm. Since 1996, the firm has invested over USD 200 billion in private equity, private debt, private real estate, and private infrastructure on behalf of its clients globally. To support its investment activities, Partners Group has steadily increased its global presence to become an organization of over 1,900 professionals in 20 offices around the globe.
Partners Group’s Private Equity Partnership Investments (PEPI) team has invested more than USD 30 billion in private equity secondary investments since inception, whereby Partners Group acquires existing private equity interests from LPs seeking to liquidate their fund positions. To do so, the PEPI investment team conducts thorough, bottom-up underwriting of all funds and their underlying portfolio companies when assessing a secondary investment.
Aim
As part of positioning its PEPI business for the next phase of growth, Partners Group wanted to develop a next-generation underwriting platform which would provide world-class flexibility and reliability in the underwriting process.
Key criteria included version control, data integrity, and ensuring global assumption updates, such as FX rates and public share price updates, to flow seamlessly through all models at the click of a button.
The last critical step in the underwriting process is creating and maintaining investment committee report papers, whereby the investment committee members scrutinise the investments throughout the due-diligence process. These reports contain large amounts of data aggregated from the many underlying portfolio companies involved in a transaction. These outputs need to update on an adhoc basis, automatically responding to any updates in the underlying models and data.
Approach
To achieve this aim, Partners Group selected Lionpoint to implement Anaplan for secondary analytics. The two firms worked together to capture the full complexity of the model to ensure a custom-built solution which was fit for purpose and scalable. The initial Anaplan model:
- Leverages Partners Group’s Private Equity fund modelling experience alongside Lionpoint’s technical expertise to enable company by company modelling of all funds in a secondaries transaction, from the portfolio company valuation process through to a funds’ net cashflow and waterfall.
- Allows for multiple versions (i.e. many underwriting cases) of the 2,000+ funds that exist in the Partners Group database.
- Each fund model is independent, allowing for “plug and play” relationship where multiple funds can be selected to provide instant pricing for new potential investments.
- Runs sensitivity analysis on a transaction level, flexing micro and macro assumptions to test the robustness of the bid pricing.
- Creates ad hoc scenarios of the potential transactions with different fund combinations and other key assumption changes.
Partners Group also worked with Lionpoint’s Data Solutions & AI team, utilising Anaplan’s open API to create a server-less function to regularly load and transform data in line with the existing system architecture guidelines. Triggered by an Anaplan action, the process pulls the Anaplan data into Partners Group’s calculation script and returns the results while ensuring security by utilising the in-place authentication methods. To close off, a scheduled and automated data refresh covering 30 different data files and ad hoc processes allows the investment team to write back outputs to Partners Group’s core data warehouse.
Result
As a direct result of implementing the Anaplan model, Partners Group has seen an overall efficiency saving on an initial transaction submission. The efficiency gain enables the team to spend more time on in-depth assessment of the merits and risks of the transaction in addition to free up team capacity to diligence more secondary opportunities on the market without having to compromise on the depth and quality of underwriting.
This new solution replaces the multiple spreadsheet-based models required for each transaction, combining them into one Anaplan model for all prior and future secondary transactions. Investment committee submissions are now all produced in one system, creating a single source of truth and allowing Partners Group to view submissions side-by-side for a quick & easy market snapshot.
PEPI investment team members from Partners Group’s offices around the world can collaborate and work concurrently on multiple transactions in the same SaaS solution. Anaplan’s Cloud-based single centralized platform means any additional functionality developed when pushed to the production model is automatically propagated to all transactions, ensuring version control and scalability.
