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Five Ways Deal Performance Data Can Power Up Private Equity Investment Program

By the middle of 2021, private equity buyout deals had already matched the full-year totals for 2019 and 2020. For the first time, buyout deal value is on track to top $1T.

The pressure on GPs has never been more intense. With more competition, more opportunity, and more capital at play in the industry, firms are looking to digital transformation to give them a competitive edge.

Private equity investment data analysis is a key component of this shift. Firms are experimenting with how to incorporate quantitative analysis into their processes to achieve greater efficiency and higher private equity returns.

→ Learn more about Data Analytics in Private Equity

The advantages of doing so are clear. Those firms which are at the forefront of this shift can triage opportunities more effectively, test their investment theses more quickly, and gain a competitive advantage over their peers.

But even though private equity investment professionals are producing and consuming more data than ever, their use of third-party deal performance data in the decision-making process has focused on fund-level returns. Deal-level returns data has been difficult to find, difficult to trust, and difficult to use effectively.

This is changing. As scalable and reliable solutions are developed, deal performance data is giving firms an unprecedentedly deep level of insight on which to base their decisions. Deal-level analysis has applications in deal sourcing, due diligence, investment thesis testing, sector strategy, benchmarking, and fundraising.

Firms that are embracing the next frontier of private equity digital transformation are gaining greater efficiency, efficacy, and impact in their investment decision-making processes. Here are five ways that deal performance data is helping them to unlock their full potential and achieve stronger, more resilient private equity returns.

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High Inflation and PE Deal Performance: US deal returns during rising and high inflation (1986-1991)

How high inflation affects private equity investment is a complicated question. But the industry has undergone previous periods in similar environments. To offer a case study into how historic deals have performed in these circumstances, we look at private equity deal returns during the previous historic period of high inflation: 1989-91. 

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Private Equity Performance During a Recession: Deal Performance in the Global Financial Crisis

As the prospect of a global recession once again looms over financial markets, DealEdge has looked at how private equity deal performance was affected by the last major recession: the Global Financial Crisis (GFC) of 2008-9. 

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