Why culture could be the missing link in private equity's data challenges
Available data for alternative assets is expanding at top speed, handing managers a goldmine of information and arming them to make savvy investment moves and fine-tune operational efficiencies. Ensuring transparency, quality, and data accessibility has never been more important for general partners (GPs).
Yet the tidal wave of data that organizations are handling poses a significant challenge for private equity firms. Many find themselves struggling to consolidate large volumes of data from disparate, siloed sources.
Three ways AI is changing the private equity game
Financial market participants, including banks, insurance companies, pension funds, and hedge funds, are all actively exploring ways to leverage artificial intelligence (AI), and private equity (PE) firms are no exception.
Three areas that are showing a significant return on investment (ROI) for AI among PE firms are deal flow, investment pre-screening, and risk intelligence, because it’s these areas where AI is helping them shift their window to act earlier than their peers. The private companies that PE firms invest in are simply far less transparent than public ones: There’s just not as much information about them, and the information that exists is generally much harder to get.