The rise of data opportunities within private markets
Data science is becoming an increasingly valuable asset within the private markets, with significant growth across the industry building data practices in-house.
Whilst investment and portfolio teams have made use of data for many years, there has been an increased focus on bringing in experts to help portfolio companies unlock their data potential, whilst also adding value across the business from an analytical perspective.
Whilst investment and portfolio teams have made use of data for many years, there has been an increased focus on bringing in experts to help portfolio companies unlock their data potential, whilst also adding value across the business from an analytical perspective.
What skills and experience are PE funds looking for when hiring data professionals?
This is still a relatively new role for many funds and whilst a number of large-cap funds do have built-out data practices already, there has been a shift in recent years that has meant that newer funds are looking to bring in a data scientist to lead analysis and system implementation across the business.
The majority of these hires are somewhat flexible in terms of experience, with firms often needing an expert in a specific system that other private equity firms simply may not make use of. Generally, there is an emphasis to bring in candidates with a strong quantitative background, a degree in computer science or data engineering, for example, is often the key to a strong data hire.
The bulk of the work will be highly system-focused, with plenty of coding and data analysis ensuring that the firm can gain a better understanding of fund performance through visualisations or dashboards constructed by the data professional. The data hire needs to have exposure across an array of systems, coding experience across numerous languages and the ability to critically assess anomalies within the data in real time.
In addition to the more quantitative element of these roles, there remains an importance to bring in the right character as the majority of these roles require the skill to make complex data far easier to interpret for numerous teams across the business. An in-house data professional must have the ability to build strong working relationships across the business to ensure that they are adding value in as many departments as possible.
Where can a data professional add value?
Data roles vary significantly from firm to firm and have the potential to add value across an array of functions within the business.
Perhaps most obviously, a data professional can revolutionise portfolio management and introduce new KPIs to measure performance whilst making use of technologies to develop reporting processes across the portfolio too. Data can also be hugely valuable during the due diligence phase of investments as well as during the exit process as they can offer insight into previously unused statistics and metrics.
Data roles can be incredibly commercial with their data increasingly being used by various teams across the private markets such as operations, ESG and finance. Whether this is within a data manipulation capacity or simply support in transitioning a system across to a more efficient platform, the data professional can truly add value across all areas within the firm.
Perhaps most obviously, a data professional can revolutionise portfolio management and introduce new KPIs to measure performance whilst making use of technologies to develop reporting processes across the portfolio too. Data can also be hugely valuable during the due diligence phase of investments as well as during the exit process as they can offer insight into previously unused statistics and metrics.
Data roles can be incredibly commercial with their data increasingly being used by various teams across the private markets such as operations, ESG and finance. Whether this is within a data manipulation capacity or simply support in transitioning a system across to a more efficient platform, the data professional can truly add value across all areas within the firm.
What does the candidate pool look like?
As a relatively new space within the market, the candidate pool is somewhat more open than the majority of roles within the space.
There are specific data consultancy firms that have excellent teams that focus solely on data usage with private equity clients, whilst the larger consultancy practices also have a huge data teams that will have worked with financial services clients previously. Some accountancy practices have also built out impressive data analysis teams that focus on similar work to a data professional in-house.
There are also a number of smaller firms that focus on specific system consultancy, so it can be valuable to search for specialists on a certain system if that will be the primary focus of the hire. As in-house teams start to develop there will soon be a huge pool of data talent already situated within the private markets that could be looking for a new challenge too.
It is an area that is going to enjoy significant growth over the next few years and a number of funds are looking to get ahead of the curve by building out data teams early to ensure they are transforming their data usage to ultimately accelerate their growth.
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