Case study

From scenario analysis to distribution of probabilities of outcomes

Background

A GP wished to see the final expected return distribution of its funds modelled recurrently – including cash flow forecasting and stress testing.

Issue

The GP wanted to complement its approach built on three scenarios (base, stressed case and high case) by truly stochastic analyses.

Our intervention

With our proprietary stochastic models, we analysed the different funds and reported to the client on the requested parameters on a regular basis. Discussions led to a better understanding of the potential outcomes of the portfolios and influenced the decision making process of the GP for future deals.

Case study

Setting up a risk management function

Background

A large LP had to set up a full risk management function, starting by a risk management policy, governance, risk manager’s profile, risk management tools, data gathering and management, and reporting templates.

Issue

The client was starting from scratch while pressure from stakeholders, including the regulator, was mounting.

Our intervention

LDS Partners, in close collaboration with the client, wrote the risk management policy, defined the governance, and introduced the full set of models, tools, reporting templates and data gathering mechanisms to secure a quick upgrade of the client’s capacity in relation to risk management for portfolios of private assets.