Data quality tops the list of challenges in APAC private asset investing

Among large investors in Asia, the appeal of private market assets is rebounding - according to a recent study sponsored by IHS Markit, over 65% of respondents expect their private market asset allocation to increase or remain the same in 2021, compared to an over 70% decrease in allocation to this category in 2020.

In the 2nd quarter of 2021, IHS Markit teamed up with Risk.net to learn about data challenges facing private market investors in APAC as allocations into private assets grow. We surveyed more than 150 institutional investors in the region about their investment sentiments, and we also asked how data collection and compilation challenges impact investment decisions.

Among the top challenges in supporting private asset allocation decisions were issues surrounding data:

• 79% of respondents told us they expect an increase in the volume and depth of data to be utilized in investment decision-making in 2021.
• Only 6% of respondents indicated they are highly effective at data collection. On a rating scale of 1 to 5, where 1 was the most effective, 60% of surveyed organizations with an AUM of more than USD 100 billion gave themselves a rating of 3 or above on this topic.

The challenge of securing data was keenly felt across different private assets and throughout the investment life cycle, a condition that could be exacerbated as institutions increase their allocations. Industry-wide, there is strong demand for relevant and reliable private market data solutions. We see most respondents prepared to invest in enhancing their private market asset data collection and management process.

In the important and fast-growing world of private market investing in Asia, the availability of quality data and collection methods has fallen short. More investors are recognizing the need for better data for use in managing their investment lifecycle.

Download the full report to learn more about how sophisticated APAC-based investors are thinking about data collection, analysis, and reporting.

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This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.