Sebi circular dated 5th February 2020
SEBI has mandated AIF’s to form a benchmark and release by 1st July 2020 (extended to 1st October 2020).
Watch the video to know how alt Indices could help you comply with the regulation.
What do benchmarking agencies do?
Benchmarking agencies or index providers are independent organisations established on the IOSCO framework that issue a certified value for the index which is representative of the industry, this is similar to what auditors would do for your accounts.
How could Alt Indices help us?
Alt Indices is developing a seamless, comprehensive solution for complying with the SEBI regulation, reducing the process timeline from weeks to days. Alt Indices intends to leverage proven fintech innovations to overcome the limitations posed by benchmarking of private investments such as cryptographic pseudonymization, AI redaction, and CKYC.
Alt Indices aims to not only facilitate compliance with the SEBI circular but also incorporate other recommendations of the Alternative Investment Policy Advisory Committee (AIPAC) report whereby the committee also proposed dissemination of public market equivalent benchmarks and distribution of performance metrics:
- Public market Equivalent Values (PME): Our PME would rely on public equity indices alongside the size and timing of cash flows for a private equity investment to compute a public market equivalent for the private equity performance experienced. This benchmarking technique would answer the critical question – “How much better (or worse) off am I as a result of my decision to invest capital into Private Equity instead of directing it to a passively-managed broad market index?”.
- Distribution of performance metrics: Distribution of performance metrics is a standard measure that offers a closer look at the investment selection and management skills of the general partner (GP) relative to those of GPs seeking opportunities in a similar private equity arena at a similar point in time. In particular, the distribution pattern helps identify top-performing funds, i.e., funds performing above the median across performance indicators and the “top quartile” – a gold standard for private equity investments.
Furthermore, Technology being the essential building block of our team, we are highly flexible in terms of collection & verification of data and delivery of indices.