This Is the Role that Private Market Investors Needed to Fill Yesterday

March 4, 2021 Tom Vogt

The last 12 months have created a near-perfect storm for data management in the private markets. Uncertainty in the markets led to greater demands from investors who want better information faster. Remote work resulted in more people managing Excel spreadsheets from desktops instead of file servers. The pressure to do more with less surged. A frenzy to invest in technology to solve these problems led to failed digital transformation with no owners of new workflows and data integrity.

Which brings us to the hottest job in the private markets this year: Data Quality Manager.

You can call it a data quality manager or a data analyst or even a Chief Data Officer, but it all comes down to the fact that private market asset managers need to appoint at least one individual who is entirely responsible for data quality. Although this person would become the owner of technology systems such as an investment data management platform, this role is a business function and should not report up to the CTO. This person drives efficiency and better investment decisions for the firm and they create a competitive advantage by providing faster and more accurate reporting to LPs.

In a recent report called “Prime time for private markets: The new value creation playbook,” PwC makes a strong case for private market investors to invest in technology systems to streamline their data management processes. But it doesn’t stop there:

“To strengthen the consistency of decision-making and support operational integration across functions, it’s important to have a single “golden source” of information for use by all functions. To strengthen data quality and governance, it’s also important to assign data owners or stewards.

Many firms already do this in other areas. When a company invests in CRM for managing pipeline activities, who pulls together the information for a weekly or monthly pipeline review? A resource assigned to own it and ensure it is updated – this is an immediate role assigned with a CRM and not budgeted as a cost at all, let alone to the vendor. Why is it different with a Data Management system? In many ways, it’s even more important, since Deal Management, Portfolio Management, ESG, and Investor Relations are often very siloed groups, each with its own interpretation of data. The Data Quality Manager would create the single source of truth.

We have witnessed firsthand what happens when an asset manager assigns someone to this role at the beginning of implementation and maintains the oversight after it’s done. And unfortunately, we’ve also witnessed when they don’t. The difference between the two experiences — and the efficiencies created, their ability to scale, and their trust in their data — are stark.

In one case, the company bought a Ferrari and learned how to change its oil, rotate its tires, and scouted out backroad jaunts to experience its horsepower. In the other case, the company bought a Ferrari and let it sit in a garage until the battery died.

So how should a fund manager go about approaching this new role? Here are some tips to consider:

  • Think of it as an owner of a process, not the owner of a technology platform. Executive sponsors should not look at this position as an additional cost of a vendor. Rather, they should look at it as an investment in a new operational business process that needs accountable ownership. That mindset is critical. Accounting is known for “month-end close.” Data Management has no defined period, and that is part of the challenge of achieving quality. Make Data Management a process with a formal routine, and manage to it.
  • It could be someone already on your team. We’ve seen many cases where the champion of the data platform becomes the de facto data quality manager and follows through with adoption and scalability. This is often the case in smaller firms.
  • The relevant talent for this role is abundant. Data analytics and data science are common areas of study these days. The key is to select someone who has a business mindset. What are the goals of the business and how can I manage the data to create more valuable opportunities for decision-makers?
  • Market the value of this role. Software certifications are proudly displayed on LinkedIn profiles because they enhance careers. They represent successful ownership of key initiatives that have business outcomes, not technical mastery of products. It should not be a side responsibility that has 6th priority; it should be a sought-after initiative that is top of mind regularly.

Ready to commit to your data quality? We created a job spec for you. Download it now and customize it to make it yours. 

 

 

The post This Is the Role that Private Market Investors Needed to Fill Yesterday appeared first on Mercatus.

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