Building Trust in Illiquid Markets: an AI-Powered Replication of Private Equity Funds
Fuente:
arXiv
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| Autori principali: | , , , , |
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| Natura: | Preprint |
| Pubblicazione: |
2025
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| Soggetti: | |
| Accesso online: | |
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| _version_ | 1866908614485082112 |
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| author | Benhamou, E. Ohana, JJ. Guez, B. Setrouk, E. Jacquot, T. |
| author_facet | Benhamou, E. Ohana, JJ. Guez, B. Setrouk, E. Jacquot, T. |
| contents | In response to growing demand for resilient and transparent financial instruments, we introduce a novel framework for replicating private equity (PE) performance using liquid, AI-enhanced strategies. Despite historically delivering robust returns, private equity's inherent illiquidity and lack of transparency raise significant concerns regarding investor trust and systemic stability, particularly in periods of heightened market volatility. Our method uses advanced graphical models to decode liquid PE proxies and incorporates asymmetric risk adjustments that emulate private equity's unique performance dynamics. The result is a liquid, scalable solution that aligns closely with traditional quarterly PE benchmarks like Cambridge Associates and Preqin. This approach enhances portfolio resilience and contributes to the ongoing discourse on safe asset innovation, supporting market stability and investor confidence. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2510_23201 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | Building Trust in Illiquid Markets: an AI-Powered Replication of Private Equity Funds Benhamou, E. Ohana, JJ. Guez, B. Setrouk, E. Jacquot, T. Pricing of Securities Portfolio Management Trading and Market Microstructure In response to growing demand for resilient and transparent financial instruments, we introduce a novel framework for replicating private equity (PE) performance using liquid, AI-enhanced strategies. Despite historically delivering robust returns, private equity's inherent illiquidity and lack of transparency raise significant concerns regarding investor trust and systemic stability, particularly in periods of heightened market volatility. Our method uses advanced graphical models to decode liquid PE proxies and incorporates asymmetric risk adjustments that emulate private equity's unique performance dynamics. The result is a liquid, scalable solution that aligns closely with traditional quarterly PE benchmarks like Cambridge Associates and Preqin. This approach enhances portfolio resilience and contributes to the ongoing discourse on safe asset innovation, supporting market stability and investor confidence. |
| title | Building Trust in Illiquid Markets: an AI-Powered Replication of Private Equity Funds |
| topic | Pricing of Securities Portfolio Management Trading and Market Microstructure |
| url | https://arxiv.org/abs/2510.23201 |