David Walters, digital investment manager, MSIF

How is your organisation using data and analytics to support the corporate vision and purpose?

Data and analytics is becoming ever more important when making private equity investment decisions. Increasingly our sector is turning to platforms and datasets that are automating some of the investment processes, albeit these platforms are unlikely to ever replace instinct and backable team dynamics.

Increasingly, business founders are using data to create intellectual property (IP) within their organisations and ultimately increasing the valuation and investment attractiveness.

2020 was a year like no other - how did it impact on your planned activities and what unplanned ones did you have to introduce?

As the pandemic hit, we at MSIF (the trading name of Alliance Fund Managers) were not alone in the investment community in using our funds to help support our existing portfolio businesses. As the year progressed, however, it became clear that technology platform companies and, in particular, businesses who supported remote working and D2C strategies, remained an exciting investment proposition and were growing exponentially.

Looking forward to 2021, what are your expectations for data and analytics within your organisation?

We continue to look to invest in data rich companies who have embraced data science, machine learning and AI to create SaaS based platforms, rich in IP. At AFM, we are also rolling out new data science platforms to support our in-house investment hypothesis to allow us to see trends and make valued investment decisions.

Is data for good part of your personal or business agenda for 2021? If so, what form will it take?

While I am now an investor, I come from a chief information officer background and data is my “superpower”. Supporting companies who instinctively understand they have important data assets, but are unclear on how to harness them, is a personal interest. I see multiple investment opportunities where innovative use of data can be used for good most recently in the education sector.

What has been your path to power?

I have had an unconventional career, which in the shipyards of Birkenhead in the 1980s. I retrained as a DBA and database developer and eventually took on multiple CIO and CTO roles across the UK and USA. I came to private equity quite late and was involved in several successful exits, by putting data and analytics at the heart of organisations.

I was the first private equity data investment director in the UK and have always tried to mix operational and non-exec roles with investment roles, as I believe it is too hard to make technology investments without staying on top of the ever developing technology platforms and approaches.

What is the proudest achievement of your career to date?

I was part of a turnaround management team that successfully exited private equity-backed LBM to a US business process outsourcing trade buyer. We achieved this turnaround by placing data and analytics at the heart of the company and therefore creating deep and wide IP, ultimately maximising multiple arbitrage.

Tell us about a career goal or a purpose for your organisation that you are pursuing?

To support the Liverpool City Region (LCR) in becoming an attractive technology location for start-up and relocations from other territories. LCR has the potential to become an incredibly exciting tech hub and I am supporting the data excellence thinking within the region.

How closely aligned to the business are data and analytics both within your own organisation and at an industry level? What helps to bring the two closer together?

The private equity industry still has some way to go to align data and analytics to strategy and investment decisions. Increasingly, albeit slowly, the route into PE is changing with traditional financial, legal and management consultancy backgrounds being supplemented by technical backgrounds. This reflects the increase in technology investment deals. It can be a steep learning curve for technologists to work in PE as an investment executive, but ultimately rewarding.

What is your view on how to develop a data culture in an organisation, building out data literacy and creating a data-first mindset?

It has to start with the management team. For too long, boards have been too slow to invest in data governance and best practice and fail to recognise the benefits and value, particularly when on an investment journey. Data non-execs and more generally technology non-execs are more than ever needed to support management to transition to data IP value.