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Raj Iyer

A Key to Alternative Asset Investing: Private Market Data Explained




Unleash the potential of alternative asset investing with private market data

Private market data holds the key to unlocking valuable insights for alternative asset trading and the world of privately held companies. Today the demand for alternative assets is on the rise from both retail and institutional investors looking to diversify their portfolios. This appetite drives the need for greater insights into private markets.  

What is private market data?

Private market data is the information related to alternative assets that are not publicly traded. This data includes private equity deals, venture capital investments, real estate transactions, hedge funds and commodities. It also includes data that informs an entity’s growth, size, scale and valuation, which is vital in identifying the appropriateness of the investment Unlike public market data, which is easily accessible to investors through various exchanges, private market data is not as widely available as financial information for private companies is not standardized because their shares are not traded on public exchanges. This makes it difficult for investors to access information about these companies, including their revenue, growth rates and profitability.  

Another challenge is the fragmented nature of private markets. Private markets encompass a wide range of asset classes that are at different stages of maturity. Each of these asset classes has its own unique characteristics and data sources, which can make it difficult for investors to gain a comprehensive view of the private market landscape.  

The cost of accessing private market data is also a concern since much of it remains unstructured and often paper-based, which drives up the total cost of access. For smaller investors or those without significant resources, private market data can be prohibitively expensive to access and compile.

How private market data is leveraged

For investors looking to invest in alternative assets, access to data through automation and easy to use technology is particularly important. This detailed data allows investors to understand the variety of investment opportunities by better understanding the securities, funds and investments available. By further analyzing the details of these alternative assets, investors can make informed decisions to compare investment opportunities and align their portfolios with insights into historical returns, fees and liquidity.  

Leveraging data tools and more structured data allows investors to more efficiently scan the landscape, from identifying managers or funds to evaluating the performance of specific investments and comparable investments. By feeding the data into analytics and models, it can also be used to build portfolios to meet investor needs.  

Issuers that can deliver data insights are positioned to build more trust with their investors by better understanding their needs and preferences, and those data insights can even help attract and retain investors. As the market matures and both retail and institutional investors become more data-driven, they will demand additional transparency in their holdings, including their private investments. Simply put, private market data insights and analytics will become a necessary part of business for issuers and investors.

Looking for better ways to provide private market data insights to your investors? Reach out to us at Templum for more information.

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