Private Equity Solutions: Focusing on Data to Fuel Your Business

In this post, we’ll consider roadblocks firms can encounter when searching for or implementing a data strategy, which data to focus on finding, and how to get your team to effectively start using private equity solutions.

Firms that have decided to take the plunge into data-driven decision-making need to focus on what kind of data they want, how much of it is available, and what their team can do with it. Data is not just for engineers or statisticians. To use a good amount of the information that’s out there today, you don’t need an engineering degree; in fact, you may not even need your own IT department.

What are some roadblocks, pitfalls, or strategies to avoid when looking for solutions?

One problem can be prematurely jumping to the end of compiling a data strategy, which is typically where visuals and pretty dashboards come in. The problem nobody has is that they don’t have a charting application of some sort, but a data strategy is far more than charts and dashboards. If you are too eager to get straight to the charts, you’re likely to end up in a situation where you get just that: a charting application. In contrast, a data solution is more robust and can help an organization properly create and prepare the data for visual consumption via charts and dashboards.

When an organization finds that they may have a data problem, how do they determine which data could help them progress?

“What data do we need?” is a good place to start, but use careful consideration for your definition of “need”. It’s too easy to say that you need “all of the data” or “everything”. If you take that pathway, you could end up chasing information that has a relatively small impact, but a large amount of associated time and resources which may end up actually inhibiting progress. To define your specific needs, identify which problems you are having: procedural, system-wide, operational? Determine what your pain points are, and you will start to see the pieces that are missing. It will become clear what data is behind those issues, and that’s the data you need: the data involved with problems leading to inefficiencies.


“What data don’t we have yet?” is another perspective to consider. What data are you missing that would allow you to generate more useful information? An effective data strategy–a plan to solve problems related to data–can come into play here. First, identify your problems, review your processes, systems and inefficiencies, and consider where technology could be used to leverage your work, then align these with your purpose. Next, think about why you need to solve these problems. When you have a strategy in place, you’re going to become something new, do things differently, and perform tasks in other ways.

You’ve invested in a data solution: how do you get your team to use it?

For the most part, the challenge will actually become how to get your team to use your data solution correctly. The key will be outside of the dashboard and visual layers. Focus on getting through the procedural steps of accessing, warehousing, normalizing and transforming data. It won’t be difficult to get teams to start using a charting application, but they could stop quickly if they don’t trust the solution, it doesn’t have the information that they need, or it doesn’t have the answers they’re looking for.


One of the ways to solve this is to make the new data solution the only place to go. A data solution will allow you to centralize your operations by creating a single place to go for the information anybody needs, at any time. Then, the key lies in keeping users in the new system by making it useful, effective, trusted, and workable. Solutions like Altvia Answers offer real-time, self-service solutions that any business user can easily access and interact with. There’s a point at which the success of firms investing in a data solution is going to be the result of how diligent they are about identifying and buying to solve problems.

Click here to download the Guide: Data & Technology for Private Equity Firms.

A traditional crm was built for general ‘customer’ scenarios

Software platforms have made the world a better place by making work a better place. Indeed the world is better off when people enjoy their jobs even marginally more, and workplace applications on big CRM platforms like have done that and much more.

But the potential that platforms like these offer presents diminishing returns: once the platform provider has engineered too many industry specific components into its platform, its usefulness for other industries begins to be threatened, and with that so do the usefulness of the component tools built into the platform.

So it is with the CRM category that has defined: it is generic enough to work for many industries, and yet still offers the potential for others to round off the edges and nail more vertically-oriented and extremely tailored software solutions.

Private capital markets are actually a great demonstration of this dynamic. Where generic CRM platforms simplify — appropriately so — to assume there’s a business, a customer, a sale, and service of that customer, there are a few industry-specific pieces that are missing.

Take for example, that investors become customers by investing through legal entities the GP raises. It’s a subtle but important nuance that just doesn’t make sense at a platform-as-a-service level (because it’s overly complicated for a simple one-time sale that many industries require), but which can easily be added without 10 years or software engineering. Once provided, the rest of the platform’s components become tremendously powerful again and you’re set to take over the world.

As a traditional CRM in our pillars methodology, these nuances must be present to properly account for investors in these legal entities, potential target companies and which are owned by these entities, the context of all interactions with these parties (as well as the appropriate overlap, ie co-investments), and how you’re arriving at finding these opportunities on both sides of the equation, such that you’re able to piece together what’s effective and what’s not. Not just because we say so, but because these are the very relationships and data that are key to the motivation behind a CRM in any industry.

It’s critical, too, that the valuable publicly-available information that helps to enrich CRM systems and save users painful steps of entering it themselves is fully-integrated at the platform level.

Again, look no further than the 3,000+ pre-built integrations that — the creator of the CRM platform concept — has at a platform level to do so, and which only exists by way of holding just short of overly-specifying certain industry workflows that would present challenges to properly integrate.

Stakeholder reporting and communication (investor relations) draws on a range of datasets

The traditional “customer service” model of CRM systems once again makes overly-simplified assumptions about the customer relationship when applied to private capital markets.

In fifteen years I personally have yet to hear the terms “warranty” or “service call” in this market because it’s just not the same. But make no mistake, as uncomfortable as it may be to say aloud, customer service is more important now than ever and it’s constantly happening; the industry is, after all, considered to be a financial “service”.

As it turns out, that service is primarily information-based — it’s driven by data and takes the form of reports and analysis that drive decisions, and then end up again in investor-facing reports and analysis.

The foundational elements of a private capital markets CRM must be built such that they accommodate this data (like we discussed above), but so too that it can accommodate additional supporting data that investors (customers!) need in the context of service.

Oftentimes this supporting data — financial metrics and time-based values, for example — is believed not to meet the traditional definition of CRM and the natural thought is “well, better do this in Excel!”.

While I happen to believe Excel is still the greatest software application ever built, its introduction to this value chain we’ve discussed herein actually creates the problem many firms suffer from: key data needed to provide customer service (again: effectively the entirety of a firm’s reports and analysis) is now in disparate systems and detached.

Both of those dynamics are important and distinct: not only is this supplemental data disparate, but when brought together there is no logical association that can be made between the two data sets.

Allow me, then, to make the point very simply: not only can this financial and time-based value data (you may be thinking about is as “portfolio monitoring” or “accounting”) be a part of a CRM, it is arguably the most important part of a CRM because it’s at the core of what providing service to the customer entails — information that comes out of data!

Firms need a digital method to engage stakeholders (ie investor portals)

Investor portals are not new; in fact, for many of us — including myself — they conjure up horrifying nightmares in which we’re aimlessly guessing at folders to find the newest document we need.

So in lies the opportunity: not only have the portals we’ve come to hate not simplified the process of acquiring information, they’ve failed to create an entirely new experience that is “customer service” driven.

To be fair, this is not a B2C market where you’d be long out of business for not having focused on customer service and thus the customer’s technology-driven experience. But don’t expect to be around too much longer if you aren’t thinking about this shift.

Today’s institutional investors increasingly expect this same consumer-like experience, and a massive opportunity is being missed by not providing it. It’s not about providing them the experience they desire; it’s more about the ability to measure engagement that is had in return.

Put simply: what’s keeping the market from providing this experience is the availability of the information that’s required to create the service that provides the experience.

If you’ve hung in this long, you know that by focusing on your CRM, you have the data that’s required to manage the customer relationship and the technology-driven experience through which that information is shared to create a differentiated and opportunistic customer experience.