Northern Trust rolls out private-equity tracking system

Will Robins

2 September 2009

Trust company seeks to help clients manage PE-linked cash-flow requirements. Chicago-based Northern Trust has launched a reporting application for modelling private-equity fund behavior.

Private Outlook, developed jointly by Northern Trust and Sand Hill Econometrics, uses data on1,500 partnerships over 15 years to generate a picture of capital calls and distributions in private-equity programs.

Model behavior

The service is meant to help investors in anticipate short- and medium-term cash flow requirements, improving their ability to manage liquidity.

"With Private Outlook, investors can trade in their spreadsheets for a flexible tool that combines their portfolio information with historical data on private markets and the economic outlook to model a range of scenarios," says Paul Finlayson, private-equity product manager for Northern Trust's Corporate & Institutional Services division. "Clients can model the behavior of individual portfolios and entire private equity programs, including the likely impact of prospective investments, to estimate cash needs and avoid liquidity surprises." The service uses one-year and five-year models. The one-year model estimates capital calls by integrating portfolio data and historic takedown patterns. The five-year model projects capital call, distribution, and future valuations based on private-equity trends.

Palo Alto, Calif.-based Sand Hill Econometrics is a provider of data, research and modelling tools focused on alternative assets. -FWR

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