Cascata Solutions Expands its Private Equity Automated Waterfall Software Suite with a New Carried Interest ‘Hypothetical’ Scenario Analytics Module

Systematic and Predictive Insights for Optimized Fund Performance

Cascata Solutions, the leader in automated Waterfall administration software and services for private equity, has released a new module to its software suite that delivers hypothetical carried interest modeling and scenario analytics for greater deal-level insights and return on investments for fund managers and administrators. 

Waterfall model construction and distribution are some of the most complex tasks in the private equity back office administration, as there are limited standards and many complexities and nuances, because of the wide range of arrangements, investment structures and specialized terms.  “Carried interest is the ultimate reward for a job well done by a GP and yet most still rely on manual and bespoke processes, ad-hoc tools, e.g. Excel and key personnel making it operationally inefficient and prone to error that often results in misallocation of profits.
Through the life cycle of the fund, from fundraising through the ongoing operation and exit, being able to forecast the most optimal outcome at an investment level is crucial to making these decisions and to achieve the greatest performance” said Chuck Dooley, Cascata Solutions CEO.

Cascata Solutions’ new ‘Hypothetical’ Scenario Analytics Module provides the level of systematic predictability and insights through the life cycle of the fund to perform scenario forecasting based on user-definable and time-based parameters to evaluate the impact of hypothetical investment outcomes.  For example:

• During the fundraising phase to determine what the impact is on carried interest based on planned cash flow profile as well as fine-tuned and optimized waterfall economics prior to finalizing the LPA.   The user can either leverage the module’s simple cash flow planner that creates a hypothetical cash flow profile in no time by just providing a couple of inputs
  (i.e. drawdown start/end date and frequency, planned return to be achieved as IRR or multiple and close-out date) or input hypothetical cash flow profile from scratch.

 

• During the post fundraising phase, “In-flight” systematic analytics to assist money managers create different scenarios (e.g. price, timing, fee adjustments, etc.), projecting when an investment is to be sold with the Cascata Solutions platform, systematically calculating the impact on carried interest, leveraging data from existing fund information, securely stored on the platform, such as carried interest attributes and cash flow information that can then be easily managed to add new hypothetical cash flows and/or delete or modify existing cash flows.

With both use cases above, the system provides very powerful yet simple reporting capability for comparative analysis of the different outcomes for a particular investment-level transaction.























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About Cascata Solutions
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Cascata Solutions is dedicated to delivering advanced digital cloud solutions for private capital asset managers and fund administrators to modernize their back-office operation for distribution waterfall administration and more. Cascata Solutions is a privately held and funded company, headquartered in New York City. Visit us at www.cascata-solutions.com.

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