General partners (GPs) within the private equity space are dissatisfied with the quality of data available to them at a time when technology is rapidly transforming the sector.
Despite being upbeat about the prospects for deals in the coming year, fund allocators are more pessimistic about their operations amid a shortage of digital operational and investment information.
A survey by S&P Global Market Intelligence found that GPs are struggling with data on potential deal targets, especially third-party consensus estimates. In that category, two-fifths told the authors they were dissatisfied with the available information, while less than a quarter said they were satisfied.The same proportion was not happy with the access they have to detailed debt data and risk data on portfolio candidates, the 2026 Private Equity and Venture Capital Report stated.
The disparities in satisfaction rates for the availability of non-public data on target companies’ operations was narrower, but 37 per cent still expressed dissatisfaction, versus 35 per cent that are satisfied.
As well, a quarter was not happy with the amount of detailed financial statements they could use, while a third said they were. In each category, a substantial proportion said they were neutral.
“GPs want more and better data on potential acquisition targets,” the report stated.
Unstructured Data Remains a Challenge for GPs
The rapid growth of interest in private markets among institutions has run parallel with a surge in data and technology provisions for practitioners. Established data providers, including S&P Global and Bloomberg, are jostling with newcomers such as Alkymi and LemonEdge to source, format and supply data to all parts of the private space, especially most recently private credit.
The data transformation of once illiquid and opaque markets has been accelerated by the increased participation of institutions, which have had decades of experience in managing portfolios in the data-rich environments of public markets and tend to want the same from the other parts of their portfolios.
Institutions are leading a wave of capital allocation into private markets that has grown to about US$15 trillion, according to Preqin and the Bank of England, forcing GPs to sharpen their tech talents and search for reliable vendors.
The biggest nut to crack is finding data. In private markets, company information has been traditionally held in physical documents. The difficulty in prising information from those sources and turning it into useable material was reflected in the S&P Global survey.
It found that half of respondents cited the fragmented and unstructured nature of target-company information as their biggest data challenge. That was supported by the inclusion also of difficulties in integrating data into existing workflows, although that was a challenge cited by 17 per cent of those surveyed.The second-most cited hurdle was the high cost of data platforms. This supports a study by Substantive Research late last year that found data in the private credit market was “aggressively” priced, with renewal fees increasing between 10 per cent and 40 per cent. As well, that report said vendors were offering “take-it-or-leave-it” deals and permitting little room for negotiation.
Shortage of Information Poses Hurdles for GPs
The traditional paucity of information kept by private companies, which comprise the majority of GPs’ deal targets, remains a thorn in the side of the new wave of market participants. The S&P Global survey showed that a lack of differentiated or propriety insights was a challenge for a third of respondents, while a fifth said that inaccurate and outdated data was a headache.
The survey also highlighted data gaps when evaluating potential deal-target companies. Almost two-thirds of GPs said they were dissatisfied with the data that LPS, the providers of capital to their funds, were offering on their allocation and future mandate preferences. And more than half were unhappy with the availability of data on competitor fundraising activities.
In terms of technology deployments, few GPs said they were getting great levels of value from artificial intelligence, although most are still in the early stages of their AI evolution.
“While AI may be helping GPs underwrite investments, the majority said it was not effective at private equity tasks like sourcing deals or tracking portfolio company performance,” the report concluded.
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