Insight and foresight
have a vital role to play in making the best investment decisions despite the
growth of big data, a meeting hosted by the New Zealand Private Equity &
Venture Capital Association (NZVCA) at the Auckland offices of Chapman Tripp
heard this week (25th August).
Colin McKinnon, NZVCA Executive
Director says: `This workshop aimed to look at how businesses can gain market intelligence and
read between the lines for better investment decisions. Sophisticated investors
are using new tools for data analysis and scenario simulation to develop insight
for private capital investment origination and due diligence. Demographic changes
can diminish the value of historic data for predicting future outcomes. But armed
with an understanding of the cognitive decision process
of individuals along with an ability to “crunch” a
big amount of data, investors can provide foresight on customer behaviour
across many products and services. But it was fascinating to hear that old
fashioned personal connection still has its place. PE
managers are still looking for on-the-ground, in-market expertise and want to
speak with the right person.’
The meeting heard that resources such as the Gerson
Lehrman Group (GLG) expert
network provide relevant personal connections that give investors introductions
to people whose experience and expertise are important references to making the
best business decisions.
Charlie Ross of GLG says its network includes 450,000
experts worldwide and although conversations are personal and direct there is anonymity
for the enquirer.
Matthew Houtman of
Pioneer Capital, explains that GLG had introduced relevant experts to help a
portfolio company validate a critical strategy by providing access to experts
in the field and close to potential customers.
Michelle and Don
Perugini, Analytics & Enterprise Intelligence, EY, add that big data and cloud computing are used to build
simulation models to predict consumer behaviour, and that the psychology of the
consumer was at the heart of the modelling. They point out that the Simulait
model is based on the concept that cognitive decision process of individuals is
unchanged and that human behaviour is driven by changing content and external influences.
They note that by integrating
access to huge data resources and a model of consumer decision-making, it is
possible to make accurate predictions about future consumer behaviour. These
tools can help design products and marketing strategies for significant revenue
gain or cost saving.
Contact:
Colin McKinnon, Executive Director,
New Zealand Private Equity & Venture Capital Association, New Zealand
New Zealand Private Equity & Venture Capital Association, New Zealand
NZVCA
+64 27 640 6406
+64 27 640 6406
