Introduction
Turning tide
by The Drawdown

Our latest survey to check the pulse of digital adoption by private equity professionals, conducted in partnership with IQ-EQ, has unveiled some encouraging results.
When we last canvassed market participants back in 2021, we found that private equity was alive to the importance of good data and could clearly see the opportunities brought about by harnessing data science. However, it was clear back then that more needed to be done. The majority of those surveyed (62%) didn’t have a data lake, while only a handful of the respondents (13%) rated their current data practices as being highly effective – most (74%) said they were average.
Fast forward to today and the latest findings reveal impressive advancements. The majority of respondents (60%) are using in-house data platforms, evidencing a major progression in how private equity firms are thinking about and harnessing data. However, the data journey is far from complete. Despite the clear recognition across the industry of the benefits decent data analysis can provide, GPs are seeking more efficient and effective ways in which to extract vital insights, with a large proportion of respondents (76%) considering outsourcing their data platform.
While the advantages of data gathering, governance and analysis have clearly been well understood by the industry, when it comes to technology adoption more broadly, the survey results found an industry wanting to go much further. This echoes many conversations we have had with a range of practitioners about the delta that persists between the technology user experience we are all used to in our daily lives as consumers, and the lack of sophisticated and connected software systems available to support the running of a private capital fund.
This gap appears to be most keenly felt within the operations department of private equity firms, with 82% of our survey respondents relying on manual tools for their work. There is an important nuance to note here. Operational professionals are using software systems but there has been little progression when it comes to automation in this sphere, which speaks to the highly sophisticated tools and systems we have become accustomed to in other aspects of our lives, such as our banking apps, online shopping, communication platforms and streaming platforms.
We can see these continued rising digital expectations when it comes to LPs as well, with the survey finding that 36% of respondents face increased pressure from investors to invest in technology, while 32% of LPs expect the onboarding process to be fully digital. Against the backdrop of the current macroeconomic environment, with fundraising presenting major challenges for GPs, given that investor portals and digital onboarding platforms act as a shop window for PE houses, it is likely we will see greater focus and advancements in this area.

This document is provided for information purposes only and does not constitute legal, tax, investment, regulatory, accounting or other professional advice. For more information on the legal and regulatory status of IQ-EQ companies please visit www.iqeq.com/legal-and-compliance.