Private Equity is realising value through data science
The special skill set of operators in Private Equity and Venture Capital is a mix of deep relationships and mastery of quantitative analytical tools that assist in the origination, due diligence and value enhancement of acquisition targets. The qualitative edge is your respect and quest for the unknown, as you pioneer the use of data science in investing.
Smart technology is first and foremost useful technology
Private Capital managers are steadily embracing sophisticated technology as a business management tool. Storing and processing data in cloud-based management systems puts you in the position of being able to report in real-time to the fund managers, investors, third party service providers and, when audited or inspected, to your external accountants and regulator.
The Private Capital market is seeing unprecedented buyout activity at record high valuations. Pioneering use of data science will make the difference by undertaking deeper fact-based analysis of exponentially expanding structured data. You will know that hidden value is not always present in rows and columns of numbers and are increasingly employing the skills of data scientists who are capable of ‘taming’ big data.
You possess a data set that can literally be monetised
The deal team will already include analysts with amazing Excel and PowerPoint skills together with strong familiarity of traditional internet search engines. Technology engineers will add their expertise by deploying machine learning techniques to identify rich unstructured sources of information and find connections to other sets of data. The process requires large amounts of computing power which is efficiently obtained through cloud-driven business models.
For Private Capital the implications are significant at each stage of the acquisition cycle – pipeline screening, in-deal execution, and post-deal value realisation. Having structured what was once unstructured data, this now proprietary information sharpens the outcome and gives you an automatic advantage.
Our Memo provides further insight.