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Projections are key to formulate the expectations regarding future cash flows to have the liquidity at the desired level. Unfortunatly there is no way to predict the future reliably.

However the Apliqo LP PM solution offers the ability to model best-practices for projection based on the solid data foundation. The solution supports the standard “Takahashi - Alexander Model”.

How it works

The Apliqo LP PM projection model estimates

  • • the cumulative future distributions, 

  • •The Quarterly NAV net gains and the

  • •Quarterly cash-flows: distributions and capital calls.

 the model leverages the Takahashi-Alexander Model (a.k.a. Yale Model) and uses fund data with a minimum of 10 years. The model takes the fund strategy (e.g. Buyout) into consideration

For each investment a assumed projection curve is applied

  • Distributions

  • Drawdowns, Capital Calls, Contributions

  • Net Gain curve Scenario

these generic curves can be over-written with estimates, if required.

The model

The projection model takes into consideration the available reported data (dark green) and the estimations by the LP (light green). The model applies Apliqo proprietary projections methods (yellow arrows) to calculate the expected NAV uplift and the quarterly distributions per fund.

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Legend

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projects the quarterly values for

  • NAV

  • Distributions

  • Contributions

The key projections are based on statistical models for

  • Projected total NAV net gain

  • Projected quarterly NAV net gain

  • Projected quarterly cash-flows projections for distributions commitments

 

The projection model is aware of the fund strategies

  • Buyout

  • Growth

  • Venture Capital

The statistical model is based on fund data with at least 10 years of track-record

Apliqo LP PM supports custom statistical models. User generated models can be loaded into the system.

image-20240531-133015.pngImage Added

Info

 more details to the Apliqo LP PM cash flow projection model can be requested at
info (at) apliqo.com

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Where to maintain the projections?

The projections are maintained in the Data Management - Fund setup - Fund projection assumptions

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How are the projections calculated?

The model estimates for all Asset Classes and Strategies different contribution and distributions per quarter, based on the historic performance of the these asset groups.

Available Strategies are: Venture (VC), Buyout (BO), Growth (GROWTH), Infrastructure (INFRA), Real Estate (RE), Private Debt (PD)

The Portfolio manager applies for each fund a percentile estimate on how the fund will call capital and pay distributions.

Apliqo maintains a forecast model for these asset classes and strategies per vintage year. As an example a contribution curve for a Buyout fund rated as 75 % percentile could look like this.

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Note

Disclaimer:

  1. Limited Reliability of Algorithms: The Software utilizes various algorithms to generate projections. While Apliqo have made reasonable efforts to ensure the accuracy and reliability of these algorithms, it is important to note that they may not always produce entirely reliable results. Factors such as input data quality, system configurations, and other variables can impact the accuracy of the projections. Therefore, Apliqo cannot guarantee the absolute reliability or correctness of the algorithmic outputs.

  2. No Liability for Inaccurate Results: Apliqo and any other associated parties shall not be held liable for any inaccuracies, errors, or damages resulting from the use of the Software or its projections. This includes, but is not limited to, financial losses, disruptions in business operations, or any other direct or indirect damages arising from reliance on the projected data.

  3. User's Responsibility for Validation: It is the user's responsibility to independently validate the projections generated by the Software and exercise caution when relying on them. The user should exercise their professional judgment and consider multiple sources of information before making any decisions based on the projections obtained through the Software.

The quarterly projected NAV net gain is calculated on the

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Net gain curve

The model supports 3 different net gain curves. The curves differ from the speed, how quickly the fund reaches its total projected NAV uplift.

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Where can it be found in the solution

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Where to maintain the projections?

The projections are maintained in the Data Management - Fund setup - Fund projection assumptions

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Where can it be found in the solution

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What is the basis of the projection assumptions?

The statistical projection assumptions for the Apliqo LP PM Projection Model are based on cashflows and valuations from over 1’200 funds, with a minimum of 10 years of history.

  • Buyout funds: 816

  • Growth funds: 121

  • VC funds: 324

With the vintages between 1985 and 2014 the value development the model covers different economical cycles.

  • Dotcom-Bubble (1995-2000)

  • Y2K recession (2000-2002)

  • Global Financial Crisis (2007-2009)

  • COVID 19 (2020-2021)

To exclude the younger funds does minimize the risk to base the projection on inflated unrealized inflated valuations during a period of very low interest rates.

Table: breakdown of Funds per vintage and strategy

BO

Growth

VC

Total

816

121

324

1985

2

1986

1

2

1987

4

2

1988

5

1

1989

1

1990

1

4

1991

3

1

1992

5

2

5

1993

7

1

5

1994

16

6

1995

13

7

1996

17

2

8

1997

20

12

1998

36

1

16

1999

31

3

19

2000

33

5

37

2001

21

3

23

2002

22

2

15

2003

28

11

2004

30

3

10

2005

58

6

14

2006

66

10

20

2007

67

13

26

2008

62

9

19

2009

27

6

7

2010

36

7

10

2011

43

14

13

2012

45

11

10

2013

60

9

11

2014

57

14

9

Why are projections beyond 6 years tend to have strong dips?

The Apliqo projection model assumes a lifecycle of up to 60 quarters, 15 years. For funds older then 60 quarters only the acutal cumulative distributions are taken into consideration. Younger funds include the projected cumulative distributions up to the 60th quarter. If a fund reaches the age of 60 quarters. the cumulative distributions will no longer be taken into consideration.

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