5 minutes with… Jeremy Katzeff, GoldenSource
The Drawdown (TDD): What is the history behind GoldenSource and how does it help private equity?
Jeremy Katzeff (JK): GoldenSource is an enterprise market data management platform. It started out as a data project which spun out of IBM in the early 1980s, and was then acquired by private equity business Invus in the 1990s. We’ve been in the hands of PE businesses ever since, and most recently got acquired by Gemspring Capital in May 2022.
The platform originally provided security masters solutions to capital markets and banks. Then over the past six years or so it expanded into risks, such as pricing, curves, models and so on, for the asset management industry. And now we also provide fund accounting and data warehousing.
Our data warehouse enables users to bring in private company (or rather potential portfolio company) data from a number of external sources. Using our rules engines and data quality checks, GoldenSource can centralise, normalise and standardise that data, to create a single source of truth. GPs can then use that data to produce reports and advanced analytics.
Additionally, in May 2021 we launched our dedicated ESG offering, GoldenSource ESG Data Management. We have a large network of ESG data provider partners and content specialists. And through that network, we provide access to a broad range of ESG data coverage. Our inbound APIs, called GoldenSource Connections, allow on-boarding of current and future structured and unstructured ESG data from these partner providers. Our ESG Impact module enables users to screen portfolios and identify the specific data points needed for various ESG regulations, such as SFDR.
TDD: What do you see as being the biggest challenges PE firms have when it comes to managing data?
JK: In my view, a lot of data in private equity is still managed on PDFs, Excel spreadsheets or various SharePoint drives or similar file repositories. There still isn’t really a standardised process in place to manage the amount of data these firms handle.
Of course, LP demands for more transparency is shifting this. LPs want to see actual investment-level information, such as what portfolio companies the GP has bought, the investee company progress, ESG data related to those businesses, and so on, in addition to various fund data.
And since the pandemic, there’s been more of a push to digitalise the back office, and remove more manual work to enable some of these firms with less resource, to focus on higher value tasks.
That’s where our platform can be useful, as we can partner with those firms, enabling them to organise the chaos of that data. This enables all parties to speak the same language and understand what data they have and make better use of it.
Another huge issue is around ESG data - suddenly firms have been thrown into an issue whereby they’re expected to extend their reporting capabilities to non-financial data. It sounds easy enough, but the challenge is, a lot of this data isn’t yet being collected, or if it is, it isn’t yet quantitative. So the industry needs to catch up and build a foundation of ESG data points to make it far more benchmarkable.
TDD: Currently firms are grappling with being able to collect, manage and harness their data. What do you think? And what about expectations on reporting frequencies?
JK: I think a lot of firms are still on the trajectory of being able to manage their data, given the fact many of them are at various stages of their digitalisation journey. Once they get past this point, it’s all about being able to use analytics to create various summaries using customisable drilldowns to produce readable, visually pleasing reports. At this point, all teams internally, and externally such as LPs who are given access to various points, can access the data they want, as and when they need it.
For now, I think LPs are satisfied with having the ability to get weekly or monthly updates from their GPs. But over time, depending on how the market plays out, or if we experience more anomalies in the future, such as covid, frequencies and needs for transparency will increase. So it’s about staying ahead of that curve and being prepared for every eventuality.
TDD: What are your key focuses for the next six to 12 months? What are your next expansion plans?
Our focus is specifically on our recently launched cloud data services, as we want to bring more of the data lake approach to the buy side of the industry as well as our clients overall.
We want to ensure users have easier access to data and the platform provides better analytics to encourage faster and better decision-making. This will in turn enable GP teams to onboard data quicker, keep track of it once it’s within their data warehouses, and create those nice pixel perfect reports for LPs, other external clients or for internal use.