How to Choose a Data Provider

Back in 2011 I moved to New York to head up Preqin’s US operations, including sales, client services and marketing functions. I know a thing or two about selling data!

There are a lot of data companies in our industry. While no two are the same, all employ similar techniques to close a sale. We put together this insider guide to help you remain objective in the face of conflicting claims of superiority, take control of the selection process and empower you to procure the best services for your team.

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PE Stack tracks around 40 different data providers to the private equity and venture capital industry. We maintain detailed profiles for all of them on our powerful Vendor Profiles platform. It's free to use, and we even offer free procurement advice to our users!

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Preqin Data Now Available on Factset Workstation

Preqin and Factset announce partnership which sees the integration of Preqin’s fund manager, allocator and performance data with the Factset Workstation.

Access to the new dataset is dependent upon Factset users also having the correct level of access to Preqin’s services. Existing dual-users can request access as of today (July 15th 2019), Factset users not currently subscribing to Preqin will be able to purchase access directly from Factset.

The addition of robust private markets data will add value for Factset’s M&A focused users, including investment banking and private equity deals teams. Preqin's data will help users to identify potential buyers and benefit from deeper intelligence on PE firms – for example, the ability to view the vintage and called-up % for a firm’s latest fund.

The data will also add value for Factset’s allocator clients, as Justin Strand, Factset’s Chief Content Officer and SVP, stated: “Investments in private equity are growing and clients require corresponding data to manage these investments effectively.”

"Factset appears within 26% of data and software stacks, making it one of the most utilized vendors in our sample"

PE Stack maintains comprehensive subscription and pricing intelligence for data and software products being utilized by 50 leading institutional allocators located in North America and Europe. Factset appears within 26% of these data and software stacks, making it one of the most utilized vendors in our sample.

Our analysis suggests that this new partnership will be well received by existing Preqin users - 75% of the major allocators tracked by PE Stack that have Preqin subscriptions also utilize Factset.

Of the other major data providers, Bloomberg is the clear leader in terms of allocator penetration with 73% of institutions tracked by PE Stack maintaining a subscription. In terms of aggregate subscription value, Factset is closer to matching Bloomberg as a result of a higher average subscription value from the institutions in our sample (which is more a function of client size rather than product cost).

"75% of allocators tracked by PE Stack that have Preqin subscriptions also utilize Factset"

Preqin and Factset feature alongside another 100+ vendors with profiles on PE Stack’s free Vendor Profiles platform, which helps private equity fund managers, allocators and service providers to identify potential software and data providers. To get instant access, please register here. For more information on our Allocator pricing and subscription data, please email info@pestack.com

Digital Waterfalls

Waterfall calculations are notoriously tricky - even firms with high quality technology stacks find themselves reverting to Excel when calculating distributions. Has qashqade solved this problem with its focused ccc product?

Waterfall calculations are tricky enough that some of the major back-office solutions don’t even attempt to offer functionality in this area. The platforms that do are often limited in terms of their flexibility and accuracy. For the most part, Excel remains the popular tool in this area – a problematic scenario. Aside from the high potential for human error and lack of audit trail, it is surprisingly common to see ‘small’ or sometimes big differences between the terms of the LPA and the basis for calculation in Microsoft. There has to be a better way…

This week I spoke with Oliver Freigang, Co-founder of qashqade, and had the opportunity to take a look at the software he and his team have built. qashqade is a powerful platform built specifically to facilitate the calculation of waterfall distributions including highly complex calculations and the respective carried interest allocation. A relative newcomer to the private equity fintech space, qashqade gives users the ability to configure their setup to any conceivable level of granularity. In addition to offering more accountability and security, it also facilitates experimentation and the ability to model the economic impact of proposed terms and conditions in real time.

With fund terms facing intense scrutiny amid an intensely competitive fundraising market, qashqade can provide a boost to fund marketing efforts and is sure to be appreciated by allocators seeking transparency and understanding of an area than can make a material impact on overall returns. The platform is also likely to be appreciated by GP employees, who can see reports and results on their personal distributions.

Having experienced the product, I can vouch for its customizability, flexibility and ease of use. Since its launch in 2018, this product has gained good traction in Europe from PE and VC firms, auditors and administrators. It also has applications for start-ups.

If you’re interested in streamlining your waterfall calculation process, I recommend taking a look.

eVestment Continues Data Expansion Drive with Preqin Integration

The growth of the private fund market is having a major impact on the dynamics of the software and data industry that supports it. For today’s allocators, there is enormous complexity in terms of the number of offerings to choose from and the breadth of strategies and industries being targeted. As the proportion of assets being placed in alternatives rises, the pressure to perform has never been higher.

Allocators, even those reliant upon consultants, are increasingly turning to software and data solutions to help them manage their programs effectively. We have seen a number of new products targeted toward this sector both from existing players expanding their offerings and start-ups seeking a foothold in a fast-growing market.

For me, eVestment has been one of the most interesting companies to track, and today sees the announcement of another data integration partnership to follow on from the recently announced deal with Pitchbook, with Preqin’s industry benchmarks make their way onto eVestment’s Private Markets product.

I feel that eVestment is taking a customer-centric approach to developing its suite of products, employing a willingness to work with widely-used datasets in order to increase existing clients’ satisfaction and better attract new users to its ecosystem. It’s a smart strategy.

Having a trusted source of market data is now an integral part of the portfolio management process for allocators serious about managing their programs effectively. Software solutions which do not facilitate the integration of trusted market data sources will increasingly find themselves at a disadvantage in an environment where this functionality is becoming more common. As I mentioned in an earlier article, users are also discerning when it comes to the quality of these integrations too.

It is encouraging to see software providers providing clients with multiple options when it comes to data integration. I have heard all the arguments about the relative strengths and weaknesses of the various databases and benchmarks, but the reality is that allocators need consistency. It is far easier to sell an allocator on an excellent analytics platform if they can immediately utilize the benchmarks which they are already using to track performance.

eVestment should be applauded for successfully taking a number of standalone products such as TopQ and Public Plan IQ and creating an interconnected suite of tools which is supported by high quality external data sources. The integration of Preqin data into the eVestment Private Markets platform reinforces eVestment’s commitment to giving their allocator clients exactly what they want and need to do their jobs effectively.

DealCloud and Preqin: What Makes Integration Powerful?

Market data integration is an increasingly important feature for CRM end-users; such partnerships are common in the industry with Preqin and other providers’ data available on a variety of platforms.

With DealCloud joining the list of partners for Preqin data, I want to take this opportunity to examine what makes for a best practice integration project.

“Data Integration is not just a box ticking exercise”

I seriously question whether the people who developed my car’s terrible Bluetooth integration have ever used a cellular phone or operated a motor vehicle. It takes a good 30 seconds to activate, fails to show the name of anything other than the first track I play on Spotify and will sporadically disconnect for no reason. Incoming calls require the pressing of multiple buttons as I urge the caller to be patient and not hang up. Conversely, my wife’s car connects instantly, shows album covers while playing music, and deals with calls flawlessly.

When it comes to integration, not all developments are equal. To avoid frustration down the line, here are some of the key things to look for when assessing the quality of this vital feature:

What is powering the integration?

There are two ways in which data can be pulled into a platform. API integration is best practice, pulling data directly from the source in real time. The alternative is a periodic data dump which can sometimes be easier to develop from a technical perspective, but can be inferior in terms of the timeliness of data if not refreshed often. This might not sound like such a big deal, but for data sets where news can dictate activity it can make a significant difference. For example, a live or near-live feed of Preqin’s LP news can help fundraisers to react quickly to relevant updates which might otherwise be missed with a weekly or monthly refresh.

What data and functionality is being included?

Preqin, Pitchbook and other market data providers maintain numerous datasets, encompassing LPs, GPs, fundraising, performance, deals and more. When considering a CRM, examine the breadth of integration with your favored data provider and the depth of data. A good integration would not see you switching back and forth between platforms due to insufficient detail being carried across. Another related factor is functionality - does the integration allow for the discovery of previously unknown entities via a search on the CRM platform?

What are the subscription terms?

Data providers will often encourage existing clients to add more users, providing added value which is subsequently captured through increased fees. This can naturally cause conflict with CRM integration if there is any chance of a client gaining increased access without paying for it. I don’t see fees around integration as a bad thing if additional value is being offered, but make sure you know what the financial implications of an integration will be as you consider your overall budget and spend. Don’t assume that your single-user data license will translate into an enterprise-wide access via integration on the CRM side.

How is the UX?

I’ve seen a lot of integrations, some are integrated seamlessly into the workflow and work extremely well. I’ve seen some very clunky solutions which, like my car’s Bluetooth, don’t. A key part of the user experience will be how the integration deals with duplication and information asymmetry. You may know more than the data provider about an individual or entity. How is such disparity dealt with on the CRM side? Is there a single sign on process? Will the integration work on mobile? The better the UX, the more the data will be used and the more value it will add.

DealCloud and Preqin

The key point to take is that integration is not a box-ticking exercise and users should examine the quality of this important feature when assessing their providers. Different users will have different priorities, but the integration offered by DealCloud and Preqin appears to be a high-quality, thoughtful development. Data is being refreshed regularly from the live database which is a big plus, the breadth of data on LPs is significant and the functionality on the front end has been carefully considered with involvement from both the Preqin and DealCloud development teams based on feedback from mutual clients.

DealCloud is one of the names I hear most commonly when discussing CRM and is one of the fastest-growing platforms available today. Combined with Preqin’s data, which is especially strong for fundraising and fund investment purposes, this makes for a compelling front office solution.

Affinity takes total funding to $40.5mn with $26.5mn Series B round

Affinity, one of the fastest-growing and most talked about relationship intelligence platforms, just raised an additional $26.5mn with backing from Advance Venture Partners, Sway Ventures, MassMutual Ventures and Pear Ventures.

Affinity intends to use the new injection of funds to continue building out its platform.

The San Francisco-based company uses a machine-learning, technology approach to relationship management and CRM. I’ve had an opportunity to use the platform myself, and so far I’m very impressed with what they have built.

I intend to put together a more comprehensive overview of the solution once I’ve had more time to experience all the features, but here are some of my initial impressions:

• Setup – the initial setup is really easy, it automatically populates based on your email account and immediately starts plotting relationship maps. I was up and running within minutes.

• Import – the data import wizard is great, mapping fields is simple, and duplicates are dealt with automatically. I noticed very few glitches or issues here.

• Built for PE – the team clearly ‘get’ private equity workflows such as fundraising and deals. There are some powerful inbuild tools here to help manage day to day activity, including a feature which alerts you to emails which require a response or follow-up automatically.

• Built for lazy people – ok, lazy is perhaps not the best word. But we all have all worked with people who loathe CRM and hate to enter details of interactions they have had. I’ve seen people with their own personal spreadsheet (saved locally of course), or even the dreaded ‘human-brain-based-rolodex-combined-with-Outlook-search-function’ approach. Too bad you can’t clone brains when such employees depart!

Affinity is awesome for these people. It pulls data in from emails, automatically tracking relationships over time and helping users to stay on top of tasks. For people that are always on the road and don’t have time to be meticulous with CRM data entry, Affinity offers some great functionality. For example, if I were to receive an email from a new contact at a new firm, Affinity would log that interaction automatically, add a new firm entity on the platform and pull in any data on that entity from external sources to facilitate background research. For firms that struggle to get employees to add these things, this is a compelling feature.

• As mentioned, the system automatically links your contacts with their companies and then pulls in external background data from a number of sources (such as Crunchbase) to provide background information. This is very useful and worked flawlessly for me. That said, I would like to see some additional industry databases available for integration here, especially on the LP side.

• Relationship mapping works well. I’ve seen this kind of technology used before with mixed results, but the Affinity relationship mapping and ranking system is powerful and accurate – so if I want to find a path to talk to a company or individual, the platform will show my how I can get there via relationships I have. The platform even lets you add industry ‘Allies’ which can help to expand your ability to get high quality introductions.

My assessment so far is that Affinity is a powerful platform which offers some compelling functionality. It’s been designed with human nature in mind, pinpointing many of the areas where CRM can fail due to humans failing to update things properly. Seems to me that implementation should be straightforward compared with other CRMs I’ve seen, although I haven’t seen how things would fare for a big organization yet.

Look out for a proper in-depth view in the next few weeks…

Solovis and Imagineer Activate Collaboration

Two prominent names in the alternatives software world are announcing a new partnership combining the quantitative strengths of the Solovis Platform with the qualitative tools of Imagineer’s Synap.

When it comes to tools for allocators, the most powerful applications are those which most closely align with the workflow of today’s professional investor. Maintaining an allocation to private equity and other alternatives is a process which incorporates multiple factors:

• quantitative and qualitative due diligence on new managers

• effective monitoring of existing portfolio including risk and exposure factors

• research on the wider market and environment

The newly announced collaboration between Solovis and Imagineer will allow for the qualitative side of the portfolio management process to be integrated within the more quantitatively focused Solovis platform, which includes tools enabling investors to manage complex multi-asset portfolios with advanced data collection and standardization, reporting and analytics functionality.

Partnerships like this can be challenging to get right from the strategic business perspective, but if both partners have a shared vision and similar goals, it can be an effective strategy to quickly create a single platform with tools which are tried and tested. Given the complexity in developing such functionality from scratch, the approach taken here can lead to a better end product more quickly and less riskily when compared with either firm developing similar products from scratch.

I feel that the strengths of Imagineer and Solovis are complementary in nature and this collaboration makes a great deal of sense. It will allow both Solovis and Imagineer to gain exposure to new customer-bases and provide additional value to mutual clients.

We know that shifting between multiple platforms to complete tasks can be inefficient and adds risk to any process. Today’s LPs and GPs are operating in an environment which is increasingly complex with allocators in particular facing more choice than ever in terms of funds on the road and the strategies they are employing. Whether through partnerships, acquisitions or new developments, effective integration of complementary tools with a single source of data is increasingly important to the modern institutional investor.

Here is the link to the official release

PE Stack’s thoughts on Pitchbook and eVestment’s Data Partnership

Two of the leading names in the private fund data world recently announced a partnership that sees Pitchbook’s fund performance and firm data available to users of eVestment’s Private Markets product. In addition, Pitchbook’s benchmarks will also be accessible to eVestment users.

What PE Stack says:

Since the NASDAQ acquisition, eVestment has been one of the most exciting vendors to watch, with this deal the latest in a series of acquisitions and partnerships that have enabled them to gather serious momentum in the private fund space.

I know first-hand that building and maintaining a high-quality source of performance data is tough, both in terms of assembling the data set in the first place, but perhaps more importantly in terms of building a good reputation. Pitchbook is one of a select group of trusted vendors with performance data and benchmarks which are high-quality and suitable for vital tasks such as due diligence.

I believe that by partnering with Pitchbook instead of building a competing dataset, eVestment put themselves in a strong position where their excellent tools and analytics can be accessed without having to convince users to switch to a new set of benchmarks and performance metrics. Don’t under-estimate how important consistency is for many GPs and especially LPs in the space.

It’s a smart strategy that will allow eVestment to attract new clients at a fast pace – especially on the GP and LP side. For Pitchbook, this move cements their position as a trusted provider for fundraising and due diligence data, and will increase their exposure to end-users on both the supply and buy side of the fundraising market.

I expect to see more deals which bring external data sets directly into eVestment’s growing ecosystem. Their mix of high-quality internal data products (Public Plan IQ), powerful tools (TopQ) and willingness to incorporate external data sources is unique in the market today. What makes the offering especially compelling to me is the effort that eVestment have put into integrating their portfolio of products into a powerful, inter-connected suite.

For more information on the specifics of the deal, please see the information page here:

https://www.evestment.com/privatemarkets/pitchbook-data-partnership/

Intralinks releases new UI

Intralinks has announced that it is introducing a new UI for its Alternative Investments portal enabling GPs to more thoroughly and quickly manage fundraising, reporting and investor communications to their clients.

The new UI brings more modern functionality and feel to the Intralinks platform at a time when LP expectations around reporting are at an all time high. A GP's ability to provide high quality reporting in a frustration-free setting on both desktop and mobile devices is becoming a core expectation, with outdated functionality reflecting increasingly poorly on a GP's brand in a time where quality offerings are becoming more commonplace.

Some of the key functionality on the new UI includes:

• Easier to navigate within an exchange and across funds

• Ability for users to drag and drop files

• Simple to add users to an Exchange, view documents from a web browser and download documents in bulk

• No need for plugins (such as Flash), and

• Mobile device support

"The world's largest community of GPs and LPs uses Intralinks technology to share information. To help make them more successful and ensure they have a seamless experience, we are committed to continually improving our offerings," said Ken Bisconti, EVP and Chief Product Officer at Intralinks.

Here's a link to the factsheet:

Information Overload!

Procuring and maintaining the right mix of data and software providers is tough, so we wrote a guide on how to do it.

You can download it here: