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Private Equity
Purpose-Built for Private Equity
According to McKinsey, private equity has been the highest-returning asset class in private markets since 2006 and that’s expected to continue as PE firms make deals, find exits and raise capital at a pace. Limited partners (LPs) remain highly enthusiastic and have continued to flood the market with fresh capital.
Keeping the momentum going, however, has hardly been easy. Chronically heavy competition has driven deal multiples to historic highs with lower margins—which affects decision making, from diligence to exit planning. Today, successful investors are seeking to digitize data management to reduce the inherent risk associated with relying on older, often incompatible, systems. LPs are also demanding more transparency from GPs to gain a better understanding of sector and climate risk exposure.
Key problem areas private equity investors are looking to solve include:
Private Equity Data Challenges
Excel Hell
Most private equity investors still rely on Excel templates for data to be filled in by portfolio companies, internal deal team members, third party asset managers, and other constituents. In addition, connecting forecast and actual data requires a seamless connection between financial models and transactional data at the asset level, which forces investors to heavily lean on Excel for manual and ad-hoc analysis.
Missing Data
Private equity investments are highly illiquid. Therefore, most fund managers only collect minimum information on their private equity assets, usually just positions with limited additional classifications. The problems escalate, as missing or incomplete crucial information inhibits other steps in the investment process, such as performance measurement, reporting to management and regulators, compliance, and other important tasks.
“Instead of addressing requests on an ad hoc basis, we now can just push a button or even during a board meeting, I can share my screen and that saves me from having to have someone dedicate two or three days of time to generate a bunch of ad hoc requests in Excel.”
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