What is Business Intelligence in Private Equity?

By: Rachel Lira

Content Marketing Manager
March 12, 2024

Using business intelligence (BI) tools, private equity firms looking to make reliable investment decisions can do so, especially when attempting to garner insights from large, complex datasets. 

Most companies that use BI rely on internal or external data to make critical business decisions. However, this data must be organized in an easily reportable, analyzable, and digestible format to support decision-making. Put simply, business intelligence is invaluable when making data-driven decisions in the private equity and investment world.

So, what is business intelligence in private equity, how does it work, and what are its benefits? 

Defining business intelligence: A primer

Business intelligence refers to a set of tools for collecting, storing, and analyzing a company’s business information to help that company make data-driven decisions.

For an average business that collects data from disparate units or functions (e.g., sales, operations, IT, marketing, etc), there’s so much information to analyze before arriving at real insights that can drive critical decisions. BI tools speed up this process, enabling business leaders and executives to have increased confidence in their decisions.

Often, a company may be unaware of the impact of strategic decisions until business data is analyzed, reported, and visualized via dashboards, enabling stakeholders to re-evaluate existing strategies or develop new ones altogether.

The applications of BI are similar across most industries, including the investment world. Private equity business intelligence software helps fund managers streamline processes for data analysis, reporting, and visualization, which then fast-tracks investment decisions.

How does business intelligence work?

As a company gathers information from various business units, it’s challenging for stakeholders to determine which data will be useful for making decisions in the short- or long-term. 

Without gaining the right insights from data to drive decisions, a company could be operating blindly—even when it’s already collecting these datasets. For instance, a company may collect data from each stage of its deal sourcing funnel to determine which strategies work best when prospecting new opportunities. 

But how can this company leverage this data to drive growth?

Business intelligence comes in to help teams analyze, report, and visualize all the data collected across the funnel. Then, decision-makers on these teams can evaluate data such as the differences in opportunity size to more accurately determine better-performing processes.

When it comes to private equity business intelligence, firms looking to expand their asset portfolios can use these tools to track business outcomes, portfolio growth, deal sourcing, and other crucial key performance indicators (KPIs) that drive expansion. 

The benefits of business intelligence

Organizations that implement business intelligence in their decision-making benefit from:

Combined, these benefits drive reliable decision-making and improve an organization’s long-term performance. In private equity, leveraging business intelligence solutions to make decisions can differentiate one firm from another because processes such as identifying potential investments, sourcing deals, managing asset portfolios, and nurturing investor relationships are driven by data-backed insights and not mere speculation.

How to create a business intelligence strategy 

Although business intelligence strategies might differ from one organization to another, they typically involve:

Business intelligence tools

So, what are some of the common business intelligence tools on the market? Between traditional less automated tools and modern highly automated ones, BI tools include:

The future role of business intelligence

As BI continues to grow, there are many ways organizations can use it to optimize their existing practices, scale quickly, or achieve their desired efficiencies. With tools like process modeling, businesses can actually stay ahead of industry trends and differentiate themselves from their competition.

As AI becomes rampant, businesses will most likely leverage BI to drive customer acquisition, using machine learning tools to customize marketing processes and reach customers more effectively. For organizations that depend on the supply chain, BI will help predict logistical bottlenecks so these companies can minimize delays or plan for them.

On the analytics side, companies will most likely be able to process larger amounts of data faster when using business intelligence. For private equity firms and investors, such analytics capabilities could increase the efficiency of complex processes like deal sourcing, transaction monitoring, or relationship management. 

Allvue Systems’ approach to business intelligence

Private equity firms can use business intelligence to improve their decision-making processes, quickly visualize complex data, and identify crucial patterns that may be hidden in the vast amounts of data they gather. Deploying a BI-driven strategy can significantly improve decision-making efficiency for any fund manager.

Whether you’re looking to chart a clear path to successful private equity deals, improve access to critical information, or expand the firm’s business to new investments, it’s important to invest in robust, purpose-built business intelligence software tools like Allvue’s.

Request a demo to learn more about Allvue’s private equity business intelligence software.



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DBTA. Deloitte Collaborates with Informatica and Workiva to Simplify the Management of Environmental and Social Governance. https://www.dbta.com/Editorial/News-Flashes/Deloitte-Collaborates-with-Informatica-and-Workiva-to-Simplify-the-Management-of-Environmental-and-Social-Governance-162555.aspx

Forbes. 14 Powerful Business Use Cases That Combine Business Intelligence With Machine Learning. https://www.forbes.com/sites/forbestechcouncil/2022/10/13/14-powerful-business-use-cases-that-combine-business-intelligence-with-machine-learning/?sh=5959fa405bd6

Investopedia. What Is Business Intelligence (BI)? Types, Benefits, and Examples. https://www.investopedia.com/terms/b/business-intelligence-bi.asp

More About The Author

Rachel Lira

Content Marketing Manager

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At Allvue, we’re committed to harnessing technology and expertise to tackle the biggest challenges facing the private capital space. Our Resources hub, offering blog articles, whitepapers, case studies, videos, and more, shares industry best practices and reflects the experience and learnings of top Allvue experts and our partners motivated to see this industry continue to grow and thrive.

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