Dry Powder: The Private Equity Podcast
One holy grail in the private equity world is finding truly reliable data on deals, and we mean data that can be analyzed and looked at in cross sections and over time.
And while Bain has substantial deal databases of its own, we have been looking for a partner to help us up our game.
After five years of meeting with virtually every data vendor out there, we finally came to the door of Dr. Daniel Schmidt, the CEO and founder of CEPRES.
“CEPRES is a digital investment platform where LPs [limited partners], GPs [general partners] or other intermediaries are connecting together and exchange data on their transactions,” Daniel explains in the latest episode of Dry Powder.
So many data vendors promise the moon when it comes to deal data, but how many of them have 70,000 deals in their database the way CEPRES does? And how many of them have hundreds of variables per deal that are all verified and all sourced from the GPs themselves?
Not many. And that’s because Daniel has invested 15 years in building a system within which GPs, LPs and other financial intermediaries could securely share information. It’s a foundation of trust that few vendors can match.
“The confidentiality and the secure exchange allows us to generate the largest data set in the world to even better understand the drivers of returns,” Daniel says, “like EBITDA [earnings before interest, taxes, depreciation and amortization] revenue, financing structures of deals, even debt pricing, so [that] we can talk about the capital structure of deals, which helps these market participants solve problems which they otherwise couldn't solve.”
I sat down with Dr. Daniel Schmidt to talk about what CEPRES brings to the table in terms of data and analytics and how it could be a key input into refining your own investment strategy, due diligence and investment committee processes.
Just getting a little bit better in a batting average game such as private equity can actually have an outsized impact on returns to LPs, GPs and all stakeholders in the industry.
The Private Equity Podcast
In our podcast series, Bain's Hugh MacArthur interviews leading experts on the trends and opportunities that will redefine the private equity industry.
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First published in Januar 2020