By: Allan Parks
Product Manager, Portfolio Monitoring
March 6, 2024
SEE IRR HUB IN ACTION: WATCH ON-DEMAND WEBINAR
Allvue is excited to announce the launch of our new IRR Hub within Allvue Portfolio Monitoring. As regulators and LPs alike raise their expectations for data transparency from private equity and venture capital managers, this new module directly addresses key pain points GPs face when calculating IRR, tracking fund expenses, understanding hypothetical scenarios for their funds, and more.
Read on for more details on what IRR Hub can do for your private equity or venture capital firm, and why we decided to build it.
What can IRR Hub do for you?
While Portfolio Monitoring helps you GPs collect, analyze, and report on the performance and operating metrics of their holdings and funds, our IRR Hub add-on allows you to:
- Create IRR calculation scenarios (base, bull, and bear case performance forecasts)
- Aggregate gross and net IRR calculations across entire funds
- Aggregate gross and net IRR calculations across industries or geographies
- Assign and modify hypothetical exit values by asset/investment
- Add fund-level expenses
- Configure cash flow mapping to align with varying IRR calculation methodologies or assumptions
Why we built Portfolio Monitoring’s IRR Hub
IRR Hub helps GPs tackle some of the top challenges faced in today’s private equity and venture capital environment.
Disparate solutions and lack of consistency across data sets
Many GPs rely on multiple platforms to track fund and portfolio company information needed to calculate IRR, often resulting in the lack of a golden copy of data. With IRR Hub and Portfolio Monitoring, users can count on seamless integration with Allvue’s Fund Accounting cashflows and chart of accounts, or they can upload cashflows from a third-party accounting system, leaving gross vs. net IRR assumptions consistent across assets and funds.
Risk of error in manual solutions like Excel
IRR Hub automates key fund and portfolio company data analysis and hypothetical scenario testing, meaning teams face less work and risk of error whether trying to help drive investment decisions or conduct detailed and iron-clad investor reporting.
New regulatory rules for private fund managers
The U.S. Securities and Exchange Commission (SEC) adopted a new marketing rule for private funds in 2023, changing the way GPs are allowed to represent IRR in their reporting. The rule prohibits any presentation of gross performance without the inclusion of net performance with at least equal prominence, calculated for the same time period, and using the same type of return and methodology as the gross performance. With IRR Hub, your teams can easily create these calculations and provide the transparency and consistency expected by regulators and investors alike.
Ready to learn more?
Reach out to Allvue for a live demo of Portfolio Monitoring’s full IRR Hub capabilities.
More About The Author
Allan Parks
Product Manager, Portfolio Monitoring
Allan Parks, Product Manager of Fund Performance and Portfolio Monitoring Solution joined Allvue in 2021. Previously, he was a Product Manager of Portfolio Construction Services at Capital Group, and prior to that, a Portfolio Advisor at Merrill Lynch’s Private Banking and Investment Group where he led Private Capital (Alternative Assets) portfolio allocation for a $5Bn AUM team serving foundations, family offices and UHNW. He is a graduate of University of San Diego, he holds an MBA from Thunderbird School of Global Management (ASU), and he is a CFA Charterholder.
