Private equity, and any financial business for that matter, is notorious for being data-driven. The private equity due diligence process is centered around collecting, analyzing, and assessing data and information. This data collection process can sometimes be a source of frustration and miscommunication for both the buyer and seller. Fundamentally, however, the core assessment comes down projected future cash flows relative to the risk of attaining those future outcomes. Data is essential for any investor to assess an opportunity. It is like a fish to water, just an investor’s natural habitat!
To your potential dismay, a private equity firm’s obsession with data doesn’t stop when the deal closes – in fact, it only becomes more important.