Private equity
Private equity is an alternative investment class that is not listed on public exchange. Private equity is based on a partnership of investors who provide capital that can be used to buy and manage companies before selling them. In FA Platform, you can manage private equity investments in your customers' portfolios and track performance indicators.
Private equity securities in the customers' portfolios are managed with "PE" transaction types that record capital commitment, costs, capital calls, capital returns, and profit returns. Capital calls and capital returns can be also recorded with a corporate action to multiple portfolios.
The valuation of private equity securities is different from, for example, stock valuation. The changes in market value are be recorded with "PE - Value change (PEVAL)" transactions that add the position's market value.
Note
If you are running a private equity fund, use the FA Fund Management app to manage the fund investments.
Create a private equity security
To create a private equity security:
Choose New → New security in the top menu in FA Back.
Select the "Private equity" security type and fill in the mandatory fields in the Basic info tab.
Once you created a security, you can create capital commitments in customers' portfolios.
Create a commitment
To create a commitment for a private equity:
Create a "PE - Commit" transaction. Enter the commitment amount in the Amount field, and "1" as the unit price.
Add the Total commitment and Remaining commitment columns in the Overview (otherwise the created commitment is not visible as a portfolio position).
Once the transaction is accepted, you will see the private equity as a portfolio position. The Total commitment and Remaining commitment columns show the committed capital amount and the capital amount to be invested.
Manage private equities
To record the operations with private equities, use the "PE" transaction types listed in Transaction types for Private Equity (PE). To run capital calls and capital returns with a corporate action to multiple portfolios, see Capital call and Capital return.
Follow private equity investments in customers' portfolios
You can track the status of the private equity investments in the Overview using the following columns:
- Amount
The total called amount, taking into account capital returns.
- Purchase value
The purchase value of the private equity investment, taking into account costs and capital returns.
- Market value
The market value of the private equity investment, taking into account calls, value changes and capital returns.
- Remaining commitment
The remaining commitment, taking into account commitments, calls and re-callable capital returns. Remaining commitment is calculated based on transactions that either increase or decrease commitment, and is available in portfolio and security currency (Remaining commitment (c) column).
- Total commitment
The total committed capital, based on PE-Commit transactions. Total commitment is available in portfolio and security currency ( commitment (c) column).
Monitor key private equity indicators
You can track the commitment and other private equity indicators in the Analytics+ view. You can find the list of analytics figures in (Private Equity) Fund measures.