The IRR Calculation Tool You Need to Meet SEC Regulations with Ease

Authored by: Peter Rosenstein, Chief Product Officer, Digital Solutions
Updated on: January 30, 2024

The SEC’s response to the amendment of the Marketing Compliance Rule has reiterated that in any instance where Gross Performance is reported, including any case studies on a single investment, Net Performance must also be reported.

This recent, increased focus on transparency and the accuracy of promotional materials means that private equity firms must be more meticulous in their calculation and presentation of IRRs. They are obligated to provide all necessary disclosures for clients to understand how the figures have been calculated, including the key assumptions involved.

The Sensr® IRR calculation tool is essential for GPs to meet the demanding reporting requirements of the SEC and their LPs. By automating the process, Sensr® ensures accuracy, speed, flexibility, and informed decision-making.

With the capacity to quickly calculate Gross and Net IRR, your team can explore multiple scenarios and assumptions, while saving valuable time and energy. Sensr® empowers your team to make well-informed and precise decisions that lead to better investment results.

Sensr® IRR Calculator Capabilities

Transparent & Accurate IRR Calculations

Allows for the transparent calculation of IRR, with detailed disclosure of the underlying cash flows and key assumptions. This can help maintain compliance with the SEC's new rules around the presentation of IRRs.

Standardized Methodology

Uses a standardized methodology for calculating IRR, ensuring that IRR calculations across different investments are consistent and can be compared on an equal footing. This helps satisfy the SEC's requirements for consistency in IRR calculations.

Real-Time Access & Visibility

Provides GPs and LPs with real-time access to fund performance data, which can enhance transparency and investor relations. It also gives GPs a better ability to manage their portfolios, and it provides LPs with greater insight into their investments.

Advanced Analytics & Reporting

Provides advanced analytics capabilities, including portfolio analysis, attribution analysis, and scenario analysis. This can help GPs make better investment decisions and help LPs understand the potential impact of different scenarios on their investments.

Compliance & Governance

Aid in compliance management and governance by helping funds maintain and demonstrate compliance with the SEC's new Marketing Compliance Rule.

Published on: September 13, 2023