Scaling Data Management for Private Markets

GPs and LPs are consuming larger volumes of data from an increasing number of sources to support their decision-making, identify new opportunities, and satisfy the demands of investors, regulators, and other stakeholders. Industry analysts Mergermarket recently explored the topic of data management for a white paper sponsored by S&P Global. A survey of GPs and LPs in Europe and North America found that 77% of firms are using at least 50% more data sources than they did five years, including 37% who say their number of data sources has more than doubled.

The industry's increasing focus on the importance of data is a positive development. However, identifying and onboarding potentially valuable new data sources is only half the battle; the next question is whether you have the systems and processes to manage the influx of new information and use it to your advantage.

Historically, many GPs and LPs have relied heavily on spreadsheets to store and manage their data. However, this approach is nearly impossible to scale across multiple data sources on assets, comparables, risk and macros, and other data used in decision-making. Respondents to the Mergermarket survey highlighted specific challenges in relation to increasing data volumes and complexity; integrating data from multiple sources; and achieving visibility of data lineage. As the Head of Change Management at an Italy-based LP noted, "Data management becomes difficult when the volumes increase. Especially when we are not equipped with scalable data management models, we end up spending more on alternative storage."

Most firms have concluded that technology will be critical for enabling them to grow their strategies by scaling their operations. The research findings show that the majority of industry participants are actively considering the adoption of technology platforms to enrich datasets, automate data-intensive workflows and migrate operational processes to cloud-based platforms. With increasing demand for data from internal and external stakeholders, existing legacy processes will continue to prove a hinderance to achieving business goals.

There is also an increased appreciation for the importance of data management as a core component of data and technology strategies, with a focus on ensuring all users throughout the firm have access to a master record of consistent, validated data. The Senior Director of Digital Strategy and Operations of an LP in the US noted, "Working from the same master record prevents duplication of work. If employees start using unstructured and unverified information without opting for master records, it will delay outcomes."

A strategic approach to data management has many benefits, including incorporating high-quality data into decision-making; freeing up data and operational teams to focus on high-value tasks; automating data-intensive workflows; and making decisions faster and with greater confidence, based on increased levels of data quality and transparency. We are helping many LPs and GPs keep pace with the ever-changing investment environment by achieving these data management goals.

Download the full white paper here to read how LPs and GPs are transforming their approach to data management.

Learn more about how we are supporting private markets clients with their data management needs.

Learn more about our other solutions and services for private markets participants.

S&P Global provides industry-leading data, software and technology platforms and managed services to tackle some of the most difficult challenges in financial markets. We help our customers better understand complicated markets, reduce risk, operate more efficiently and comply with financial regulation.

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.