eFront: How tech can unlock private markets
eFront’s Tarek Chouman explains how data and information exchange powered by technology will open the door to increased allocations to …
This is the final article in our three-part series about the challenge of managing “Big Data.” In our first two articles, we defined the concept of Big Data as it relates to the private equity business, explored the challenges of managing it and identified areas of efficiency gain. Here, we discuss technical solutions for addressing the Big Data challenge.
Achieving operational excellence in a world consumed with data involves both technological and non-technological approaches. Prior to committing to an investment in technology, it is prudent to increase operational efficiency by optimizing a firm’s organization and processes. The combination of appropriate staffing with process improvement and simplification will help prevent errors while making the flow of data smooth and routine.
However, In order to accelerate the flow of data in a way that enhances efficiency, a technological approach is key. Technological solutions for managing and sharing alternative investment data are available.
An end-to-end solution is preferred versus multiple point solutions. Point solutions can be used to complement a core end-to-end solution, however. Such an approach encompasses the activities and requirements across a firm’s multiple departments, from the front office to the back office. Integrating these functions makes workflows and completing tasks seamless and free of interruptions like data conversion while minimizing the need to access separate systems.
are essential as they support proven methods and practices without needing to spend the time to reinvent them. After all, how different is a trial balance report from one fund to another?
is important. A firm’s solution ought to be able to grow as it does, without slowing down, losing capacity or requiring additional investment and training.
A solution that is Web-based and/or cloud-based ensures immediate data access, simpler deployments, higher user adoption and other benefits. A well-designed Web interface also ensures familiarity and ease of use, further enhancing communication and data sharing.
with technological developments, market demands, data requirements and regulations is critical to the long-term success of any solution. This is the responsibility of the vendor and why firms should seek evidence of a vendor maintaining currency in their solutions.
The industry has long needed a new approach to making the communication of data between fund managers, investors and advisors more efficient. Such an approach will do away with the need for managers to fill in specific Excel worksheets for different investors and, by streamlining the process, it will provide better consistency in even more granular data.
A recent development aimed at filling this need is the AltExchange data standard for private equity. This fully-defined standard will dramatically facilitate the exchange of information. (See the AltExchange Alliance website.) Needless to say, solutions that natively support the AltExchange data standard will have the potential to impact a sea change in efficiency in how data is shared, aggregated and analyzed. We’ll have more to say about AltExchange in future articles.
Operational efficiency and managing, harnessing and sharing data are two forces that, on the surface, appear to be in opposition to one another. Combining organizational optimization and technological enablement can turn increasing amounts of data into a valuable and easy to use resource. Technological enablement that accelerates and simplifies the flow of data can help a firm to better meet investor needs, ensure regulatory compliance and bring much desired levels of efficiency and advantage to the entire organization.