The Smarter Way to Navigate
Private Market Liquidity Risk

MASTER THE FLOWS

VISION

Trace New Routes.

We address the new requirements of the participants to the private market industry, seeking better price transparency and liquidity terms, lighter capital solutions and more efficient risk management instruments – as they prepare for broader distribution to retail and DC plans and for increased institutional regulation (Solvency II, Basel III, EIOPA’s directives, etc.).

Surprising as it may seem, the private markets are the only asset category to have just sporadic liquidity and no efficient way for investors to hedge or transfer risk. And we are filling this anachronistic gap.

PRINCIPLES

Anticipate Illiquidity Dynamics

A fresh, unambiguous, fixed income-like, quantitative take on returns.

Comparable

You pay your mortgage on a time-weighted basis. You earn interest on a time-weighted basis. You pay fees on a time-weighted basis. Why should you look at private investments only from a money-weighted, IRR, PME or money-multiple, standpoint? These measures just provide the fund manager standpoint.
Unlevered

You pay fees on the full committed capital. You take funding risk for the full committed capital. Why should the reported performance let you assume that you earn on the whole capital what you earn on part of it for a short period of time? The undrawn capital and the cash play a role. So is compounding.
Indexed

Dispersion of returns is less dramatic than reported. It’s the IRR that exacerbates the results by assuming reinvestments of the distributions. In reality higher and lower returns are smoothed by duration and mean-reverting. Indexation (as implied by diversification) becomes prominent also in the private markets.
Investable

Persistence of returns is not a certainty, diversification a requirement. With the possibility of proper indexation and synthesization offered by time-weighted returns, more efficient passive and derivative solutions are made available to investors – reducing cost and barriers to access to the private markets.

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OBJECTIVES

Simplify benchmarking.

Intelligible valuation, proper data comparability, actionable information.

Enable risk management.

Unprecedented derivative solutions, hedging and asymmetric risk possibilities.

Discover liquidity.

More transparent and equitable price formation, relative value and synthetic arbitrage.

SOLUTIONS

Innovative, Transparent, Disruptive.

Fintech applications enabled by unifying proprietary valuation metrics with a single focus: the risk management needs of private market investors.

Market Risk Focus

Strategic, tactical allocation intelligence and actionable guidance driven by quantitative market risk research

Predictive Analytics

Forward-looking, patented algorithms to extract insightful information from public markets’ valuation data

Regulated Indices

A more coherent, fixed income-like, approach to decode and measure private market performance dynamics

Physically Backed Derivatives

Marketplace solutions designed to enable efficient risk transfer and investment of PE as a Yield with enhanced liquidity

UPDATES & INSIGHTS

@thedarcroom

Proprietary technology, investment and capital markets expertise to shape a more efficient marketplace for private markets’ investors. Engagement and knowledge sharing to grow reputation, trust and lasting relations.

The Smarter Way to Navigate Private Market Liquidity Risk