S4 | Ep 23 | Increasing Enterprise Value; How Private Equity is Leveraging Data & AI to Fuel Growth with Caroline Zimmerman, Director of Data Product & Strategy at Profusion
Apr 9, 2024
auto_awesome
Caroline Zimmerman, Director of Data Product & Strategy at Profusion, talks about how private equity firms leverage data & AI for growth. They discuss the unique definition of value in PE, the role of data in value creation, and the challenges faced in the D&A community. The podcast explores the differences between PE-backed firms and others, the power of growth modeling, and the career opportunities for Data Leaders in PE.
Private equity values enterprise value and uses data analytics for growth modeling and customer enablement.
PE data analytics focus on vertical growth initiatives, face cultural challenges, and demand a blend of technical and business expertise.
Deep dives
Value-driven Insights in Private Equity Data Analytics
Private equity firms are leveraging data analytics to fuel growth. The research identifies top-line headlines like the clear definition of value in private equity as enterprise value and the focused time horizon of 3 to 5 years for investments. Data and digital leaders in PE have a unique mix of technical depth and strategic acumen, enabling evidence-based decision-making. The study highlights the significance of growth modeling, customer enablement, and pricing as key ROI positive areas that directly impact profitability and valuation multiples.
Challenges in PE Data Analytics
The main barriers in PE data analytics revolve around cultural differences and people-related challenges. The need for executive polish and the ability to drive better strategic conversations at the board level is crucial. While PE firms avoid data weeps and horizontal infrastructure investments, they focus on vertical initiatives tied to growth levers. The study emphasizes the value of empowering better decisions within the boardroom.
Talent and Compensation in PE Data Roles
Senior roles in data analytics within private equity firms command significant compensation, averaging around $450k with carry. These roles attract individuals with diverse backgrounds, including strategy consultants, digital business leaders, and former data professionals. With a focus on value creation and strategic impact, these roles demand a blend of technical expertise and business acumen.
Future Insights and Research Opportunities
The research paper will be published as an INSEAD working paper on May 2nd, with a launch event to follow. The study provides a deeper understanding of how data analytics drives value creation in private equity, offering insights for data leaders seeking career advancement. Further exploration into the evolving landscape of PE data analytics and its impact on business decision-making presents promising opportunities for future research.
In Episode 23, of Season 4, of Driven by Data: The Podcast, Kyle Winterbottom is joined by Caroline Zimmerman, Director of Data Product & Strategy at Profusion, where they discuss the research study she helped to conduct into how private equity companies are leveraging Data & AI to fuel growth and enterprise value, which includes;
The catalyst for conducting the research study
Why private equity has a very specific definition of value and how to measure it
Why PE has a lot to teach the corporate Data & Analytics landscape
The major differences between PE-backed firms and the rest when it comes to D&A
Focusing on enterprise value
Why time horizons are important and can create urgency with long-term thinking
The differences between PE Data Leaders and others
Why PE does ‘BI’ but not in the traditional sense
The power of growth modelling and the relationship with investment/capital allocation
The role of Data & Digital in value creation teams
The career opportunities for Data Leaders in PE
The two key ways that PE firms are using Data & Analytics across their portfolio
Obsessing over understanding your most valuable customers
Culture is still the main challenge to overcome
The differences between PE firms who specialise versus those with diversified portfolios
Why data monetisation affects multiple and not just profit
Why horizontal investments into data infrastructure don’t exist in PE
Why the D&A community should care about this research
Why it still should be all about making better decisions
Roles, titles and remuneration benchmarks of Data Leaders within PE
Where you can find/access the research study
A joint INSEAD research project by:
Theodoros Evgeniou, INSEAD Business School
Caroline Zimmerman, Profusion
Olly Blaydon, Armstong International
Shahbaz Alam, AWS
Get the Snipd podcast app
Unlock the knowledge in podcasts with the podcast player of the future.
AI-powered podcast player
Listen to all your favourite podcasts with AI-powered features
Discover highlights
Listen to the best highlights from the podcasts you love and dive into the full episode
Save any moment
Hear something you like? Tap your headphones to save it with AI-generated key takeaways
Share & Export
Send highlights to Twitter, WhatsApp or export them to Notion, Readwise & more
AI-powered podcast player
Listen to all your favourite podcasts with AI-powered features
Discover highlights
Listen to the best highlights from the podcasts you love and dive into the full episode