Skip to content

Subscribe to Asset Servicing & Fintech Insights

Discover more information in our monthly publication, the AXIS newsletter, including industry trends, product innovation, Fintech and more from our team of experts.

Finding the Single Source of Truth in Private Equity Data

In PE, information overload takes on new proportions. The key to overcoming this is to find a single source of truth. Explore ways you can achieve this & obtain meaningful insights from your data.

Finding the Single Source of Truth in Private Equity Data

We all know what information overload feels like.  There are news alerts, articles, emails, instant messages, and texts popping up throughout the day. And this doesn’t account for the information we seek out through internet searches, social media sites, and good old-fashioned paper.

In private equity, this overload takes on new proportions.  Because of the lack of consistency and industry norms, private equity has always been data-intensive, yet today’s practitioners are confronted with a deluge of new information arriving in a variety of different formats. As markets have contracted and alpha has become more elusive, managers have widened their scope in search of data that helps them in their fundraising goals and investment decision-making.  At the same time, investors have greater data needs to manage performance reporting, governance and regulatory compliance.

With few established best practices to guide them, GPs and LPs are still experimenting with how to capture the full value from their data. Both sides of the PE equation agree that making sense of their data, finding that single source of truth, is essential in the search for alpha.

Define Data Needs

Where do GPs and LPs start when seeking the single source of truth?  Often, it starts with conversations around specific data needs.  Starting the conversation with a more nuanced view of data, a clear understanding of how it will be used, and agreement regarding the timing of delivery can help managers and investors align objectives.

A good place to start, for both investors and managers, is to evaluate the different data components, keeping in mind how and when the various elements will be used and how important they are to both the organization and the stakeholders. Often, investors echo that they are looking for greater data transparency. Does that mean all data, or only specific data? Do they want a better understanding of valuations and expenses? Are they clear about their timing needs? And managers may be able to provide certain levels of data transparency but not others, depending on their system or operational capabilities. 

Both GPs and LPs will want to strike a balance that provides the information they need when they need it while ensuring that sensitive information or unnormalized data is not widely circulated, which can create a false benchmark.

Reach Consensus to Shape Productive Solutions

All parties to PE investing would benefit from industry consensus around data and transparency.  There needs to be industry dialog, between GPs, LPs, service providers, industry bodies, regulators and valuation firms, that reaches across barriers and involves all parties in an industry-neutral setting.

There have been wider spread efforts to create standardization around data transparency in private equity investing, especially in the wake of the liquidity crisis in 2009. The buy-side advocacy firm, Institutional Limited Partners Association (ILPA) advocated for the standardization of capital call, distribution and valuation information as far back as 2005. The International Private Equity and Venture (IPEV) Capital Standards Group put forth a principle-based approach for completeness of statements rather than rule-based standardized templates. Finally, the Standards Board for Alternative Investments (SBAI) advocates for a framework of transparency, integrity and good governance to improve the alternative investment industry.

Role of Data Aggregators

Data aggregation is a foundational issue for PE investing.  Data collection and validation for private equity investments can be challenging, making the provision of transparency more elusive. In a process that is often manual, data aggregators play an important role in providing clarity into the valuation process.  As central repositories, they provide key data sorting, cleaning and distribution services. 

When it comes to the question of finding the single source of truth in PE investing, compromise between individual investors and their managers will remain important. The first step involves taking a more deliberate and nuanced approach to data and transparency discussions among all parties. It may require both sides to better define their data needs, and what tradeoffs they’re willing to make. The next step involves finding industry consensus that can help create better practices and agreement around key issues. And finally, leveraging data aggregation services can help all parties obtain meaningful insights and full value from their data. The solution surfaces when all parties work together, allowing the value to transcend individual needs.

Kimberly Evans portrait

Kimberly Evans

Head of Corporate Sustainability, Inclusion and Social Impact
Kimberly Evans is an Executive Vice President at Northern Trust. She has been appointed the Head of Corporate Sustainability, Inclusion and Social Impact for the firm.

Confidentiality Notice: This communication is confidential, may be privileged, and is meant only for the intended recipient. If you are not the intended recipient, please notify the sender as soon as possible. All materials contained in this presentation, including the description of Northern Trust, its systems, processes and pricing methodology, are proprietary information of Northern Trust. In consideration of acceptance of these materials, the recipient agrees that it will keep all such materials strictly confidential and that it will not, without the prior written consent of Northern Trust, distribute such materials or any part thereof to any person outside the recipient’s organization or to any individual within the recipient’s organization who is not directly involved in reviewing this presentation, unless required to do so by applicable law. If the recipient is a consultant acting on behalf of a third party client, the recipient may share such materials with its client if it includes a copy of these restrictions with such materials. In such event, the client agrees to comply with these restrictions in consideration of its accepting such materials.

© 2021 Northern Trust Corporation. Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A. Incorporated with limited liability as an Illinois corporation under number 0014019. Products and services provided by subsidiaries of Northern Trust Corporation may vary in different markets and are offered in accordance with local regulation. This material is directed to professional clients only and is not intended for retail clients. For Asia-Pacific markets, it is directed to expert, institutional, professional and wholesale clients or investors only and should not be relied upon by retail clients or investors. For legal and regulatory information about our offices and legal entities, visit The following information is provided to comply with local disclosure requirements: The Northern Trust Company, London Branch, Northern Trust Global Investments Limited, Northern Trust Securities LLP and Northern Trust Investor Services Limited, 50 Bank Street, London E14 5NT. Northern Trust Global Services SE, 10 rue du Château d’Eau, L-3364 Leudelange, Grand-Duché de Luxembourg, incorporated with limited liability in Luxembourg at the RCS under number B232281; Northern Trust Global Services SE UK Branch, 50 Bank Street, London E14 5NT; Northern Trust Global Services SE Sweden Bankfilial, Ingmar Bergmans gata 4, 1st Floor, 114 34 Stockholm, Sweden; Northern Trust Global Services SE Netherlands Branch, Viñoly 7th floor, Claude Debussylaan 18 A, 1082 MD Amsterdam; Northern Trust Global Services SE Abu Dhabi Branch, registration Number 000000519 licenced by ADGM under FSRA # 160018; Northern Trust Global Services SE Norway Branch, 3rd Floor, Haakon VII's Gate 6, 0161 Oslo, Norway; Northern Trust Global Services SE Leudelange, Zweigniederlassung Basel, Aeschenplatz 6, 4052, Basel, Switzerland. The Northern Trust Company Saudi Arabia, PO Box 7508, Level 20, Kingdom Tower, Al Urubah Road, Olaya District, Riyadh, Kingdom of Saudi Arabia 11214-9597, a Saudi Joint Stock Company – Capital 52 million SAR. Regulated and Authorised by the Capital Market Authority License # 12163-26 CR 1010366439. Northern Trust (Guernsey) Limited (2651)/Northern Trust Fiduciary Services (Guernsey) Limited (29806)/Northern Trust International Fund Administration Services (Guernsey) Limited (15532) Registered Office: Trafalgar Court, Les Banques, St Peter Port, Guernsey GY1 3DA. Northern Trust International Fund Administration Services (Ireland) Limited (160579) / Northern Trust Fiduciary Services (Ireland) Limited (161386),  Registered Office: Georges Court, 54-62 Townsend Street, Dublin 2, D02 R156, Ireland.