Basic concepts

An overview of the main components of ExcelSense.

In this chapter you will get an overview of the different components involved in the process of managing a portfolio with ExcelSense.

Some of these components use terms that are generically used in the industry, and each organisation may have a different understanding of what each term means, which may cause conflicts between collaborating teams.

The following is a list of technical definitions from the point of view of the software, and is intended to clarify any potential misunderstandings:

  • Asset
  • Vehicle
  • Portfolio
  • Model
  • Indicator
  • Reporting Structure
  • Actual [a] model
  • Forecast [f] model
  • Base [B] model
  • Contingency [C] model
  • Target [T] model
  • Scenario
  • Notation

Asset

An Asset is a property acquired by you at some point (past or future) and monitored, in part, on 'actuals' by differentiating revenue and expenditure linked specifically to that property in your accounting data.

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Vehicle

A vehicle is an investment instrument that holds one or more assets and that necessarily meets 3 criteria:

1. Every asset within a vehicle shares the same ownership and management relations.

2. Every asset within a vehicle shares the same Chart Of Account (COA) for their 'actuals'

3. Every asset within a vehicle shares the same reporting structure 

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Portfolio

A portfolio is a particular aggregation of vehicles related to a customer. A company could have an Ownership Portfolio (all vehicles where the company has an ownership stake), a Management Portfolio (all vehicles that the company manages), or a series of bespoke portfolios defined by multiple parameters (e.g. all vehicles in a country, or managed by a GP, or under the same fund,…)

Model

A model is a cash flow table where the rows follow the reporting structure defined by you, and the columns represent accrual dates (in months) for any entry. Assets and Vehicles could have multiple models.

Models can be at assets and vehicles levels. They are notated with a letter within brackets (e.g. [x]), using lowercase letters to indicate that the model is at Asset level and uppercase letters for Vehicle level.

But ExcelSense also provides Portfolio level models, allowing for multiple combinations of aggregated models of both assets and vehicle while taking in consideration proportional relations (e.g. percentage of ownership). Portfolio models are notated with a letter within braces (e.g. {x}), using lowercase letters to indicate that the model is an aggregation of individual assets and uppercase letters for an aggregation of vehicles.

Indicator

An indicator is an investment parameter used to monitor and report the performance of an Asset or a Vehicle. Most indicators are computed from the models and can be expressed as Unleveraged, Leveraged, or Net, depending on the underlying data use in the computation.

In ExcelSense, indicators are predetermined based on the activities linked to the reporting structure, so there are no manual calculations and no computational risks common when using spreadsheets.

Reporting Structure

The Reporting Structure is your bespoke organization of all the activities involved in your investments (naming, coding and ordering convention). You are completely free to define and organize your own reporting structures, which will be used by ExcelSense to map your actuals & forecast entries, and to provide you with the investment indicators and reporting outputs.

Data Headers

Data Headers are the last level of each branch within the Reporting Structure. only Data Header can host Data Entries underneath.

Data Entries

Data Entries are informational lines associated to a Data Header. Every model (actual, forecast, base...) can provide different Data Entries to the same Data Header.

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Actual [a] model

Actual is the model built exclusively from the accounting data, where the rows are defined by the reporting structure and the columns by accrual date in months.

Data Entries in [a] are linked to accounts from the Chart of Accounts. 

In ExcelSense accounting information is not editable.

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Forecast [f] model

Forecast is the model built to represent the estimated revenue and expenditure of an Asset or a Vehicle, where the rows are defined by the reporting structure and the columns by accrual date in months. 

Data Entries in [f] can be created freely and programmed with multiple parameters to adjust to changes and scenarios.

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Base [B] model

Base is the model resulting from the combination of [a] + [f], in such a way that at the beginning the proportion is 0%[a] + 100%[f] and at the end is 100%[a] + 0%[f].

Data Entries in [B] are limited to one predetermined line per Data Headers, which governs the way the model handles any discrepancy between [a] and [f] for the current month.

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Contingency [C] model

Contingency is the model resulting from adding a series of contingencies to [B] to produce controlled output reports for different stakeholders.

Data entries in [C] can be freely created with multiple instances under each Data Header, like in [f].


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Target [T] model

Target

Scenarios

Scenarios

Notation

Considering that a models can be defined as the combination of a Type for a particular Scenario, and that there could be versions of each model, ExcelSense uses the following notation to easily identify which is the underlying model at any given time:

[T_m]^{s}_v

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Portfolio Lifecycle Management for CRE
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