Top 5 ways technology enables PE firms to better leverage data


Harvesting insights from data can yield tremendous returns for any organization, but only recently have private equity firms, family offices and other investor classes taken to the trend. Now more than ever, a lean, goal-oriented data program has been proven to provide private equity investors an edge over the competition and win more deals.

In this article, we explore the key characteristics of the private equity technology leveraged by leading firms in their pursuit of more reliable and actionable data that enhances business development, deal sourcing and growth efforts.

Exportable.pngExport-able and shareable reporting
With hundreds of business development activities occurring in a given month, even small and boutique private equity shops need to move their data out of Excel spreadsheets and Outlook emails, and into a CRM tool. No matter the size of the team, the firm needs the ability to export complex reports with multiple data sets in order to share it with colleagues, portfolio companies, partners, investors, and others. Without this capability, the firm will spend exorbitant amounts of time searching through files and pouring information into custom, underdeveloped reports.

Augment.pngEasily augmented
While having your own proprietary data is valuable, having proprietary data AND purchased market data is ideal. That’s because relying on your own data no longer provides full coverage of the market. The most effective private equity firms are leveraging technology that can both 1) upload decades worth of closely-held, institutional data and 2) sync with data best of breed providers such as DataFox and Sutton Place Strategies (SPS). Put simply, the seamless augmentation of CRM systems with outside data providers makes business development and investment decisions easier to make.

Macro Micro.pngTakes micro and macro views
When leveraging the right private equity technology, firms are better equipped to organize their business development activities around the levers that are most important to them. For example, a firm’s data about the deals that have been received in the healthcare industry is only actionable if it can be used to zero-in on sub-sector add-on activity or to decipher which investment banks are the most active in that industry. Similarly, geographic data that lists all the industry conferences the firm has attended is only actionable if you can zoom out and look at all the regions and cities that have been missed. The ability to have your technology respond to the micro- and macro-level needs is no longer a “nice to have,” but rather a “must-have” in order to spend time most effectively and remain nimble to the ever-changing market.

Flex.pngFlexes with the firm
As private equity firms grow and change, it’s important that the firm’s technology grows as well. Formalizing your investor relations practices? Let your technology tell you which LPs need attention. Just increased your headcount? Optimize your technology so you can view the day-to-day activities of each of your team members. Want to spur new portfolio company growth? Allow the technology to alert you of new bolt-on opportunities or market movements by competitors. The most effective private equity firms use data to create new ideas, kick-start different approaches and support each of its team members.

Playbook.pngAdjusts to any playbook
Many private equity firms use deal funnels to help calculate how many deals need to be seen (top of the funnel) in order to hit closed deal targets (bottom of the funnel). These funnels look very different firm to firm depending on deal size, deal type, industry specifications, etc. Whatever your firm’s deal process looks like, the technology that supports the process must look very similar. This will make it much easier to both optimize the time spent at each stage of the playbook and help your team adjust should the playbook change.

Especially in an extremely competitive deal environment, private equity firms need the ability to make decisions about their business development and deal management more quickly and confidently. By leveraging smart technology that flexes to fit the specific needs of the firm and that allows for easy sharing and integration with third-party vendors, firms can gather more actionable insights from their data.


Kari Lukovics

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