Streamlining Financial Data Management for Private Equity

QuantSpark created an innovative web app for an international PE firm, to collate and validate the monthly financial data submissions of their portfolio companies.

The Business Problem

Our client, an international private equity firm, faced significant challenges in managing their financial data submission process.

Their existing system proved labour-intensive, time-consuming, and prone to errors, leading to several critical issues:

• Resource Intensive: The existing process demanded one full-time employee (FTE) dedicated solely to managing the data submission process, plus weekly meetings, and additional work for investment managers, collaborating with data owners within the portfolio companies.
• Poor Data Quality: The firm often received financial data of substandard quality, compromising the accuracy and reliability of subsequent analyses and reports.
• Frequent Delays: Data owners had frequently submitted data late, causing bottlenecks in the reporting pipeline and delaying important decision-making.

Since the submitted data played a crucial role in various aspects of the firm's operations, including reporting, valuations, and investor communications, these issues had wide-ranging impacts, from operational efficiency to the accuracy of their financial assessments, which affected their relationships with investors.

The client was considering paying hundreds of thousands of pounds per year on an ongoing basis for a well-known SaaS product that solves some of these problems but decided they would be better served by investing in a more targeted solution which would improve the quality of their data.

The QuantSpark Solution

To address these issues, QuantSpark developed a comprehensive web application designed to streamline and improve the entire data submission and management process. The solution incorporates several key features:

Customisable Template Creation:

• Creates a template for download which is set up for the portfolio company in question, containing the relevant line item descriptions and existing historical data
• The template is set up to implement tight constraints on inputs to ensure data consistency

Robust Data Validation:

• Data entered is checked and validated via the app ensuring data accuracy
• Users are guided on how to resolve any issues, making it as painless as possible for end-users to complete the submission successfully

Data Visualisation:

• Provides visual representations of the data to help identify anomalies
• Helps portfolio company users understand how their data is used by the PE firm, and the importance of having accurate data

Board Pack Integration:

• Allows upload and storage of board pack files and additional supporting documents
• Enables easy comparison between submitted data and board pack numbers

Formal Declaration Process:

• Includes a step for users to formally declare the accuracy of their data
• Acts as a psychological prompt to encourage rigorous data-checking and attention to detail

Approval Workflow:

• Presents approvers with a summary of uploaded data, any issues flagged by the validation checks, and any additional commentary entered by the submitter
• Offers the option to download the full annotated dataset for more detailed checks
• Allows approval or rejection of submissions with a formal declaration of accuracy

In-House Hosting:

• The application is hosted on the client’s own infrastructure, resulting in minimal ongoing costs

Impact

The implementation of the Data Control web app has directly addressed all the pain points of the client, and resulted in significant improvements across multiple areas:

• Resource Optimisation: Saved substantial time for staff involved in the process within both the PE firm and its portfolio companies and saved significant running costs
• Enhanced Data Quality: Significantly improved the accuracy and reliability of submitted financial data
• Risk Mitigation: Reduced dependency on key individuals within the Private Equity firm, minimising risks associated with absence or turnover
• Improved Document Management: Centralised and organised storage of board pack files, making those documents available for future analysis (e.g. LLM projects)
• Increased Efficiency: Streamlined and accelerated the entire process, reducing time spent on data cleaning and validation
• Foundation for Future Work: The platform is well positioned for further development, in particular the democratisation of access to data analytics, raw data, and stored documents – all made possible by the existence of a robust and reliably updated dataset

The app has not only addressed the immediate challenges faced by the client but also positioned them for more ambitious data-driven projects in the long term.