In part I of Doing More with Data, we borrowed concepts from the world of data science and data-storytelling and applied them to portfolio reporting for private fund managers. In that post, we talked mostly about the what, “What is data-storytelling?” In this post, we’ll focus on the how, “How can I tell stories with data and enhance my reporting?”

Here are a few examples of Narrative and Data Visualization working together to tell compelling stories about how a private fund manager created value within their portfolio:

Job Creation & Revenue Growth

We’ve written previously about using operational metrics to tell a story with your portfolio company data. By incorporating data points like jobs created and revenue growth in your quarterly performance reporting, you are incorporating very real and meaningful context that boosts your story.

These may be data points you are already sharing with clients, but if they’re buried in a table or spreadsheet you’re not telling the impactful story you want to communicate with your quarterly update. The story is lost in the crowded rows and columns of a table and it is difficult to see how these companies are growing.

 Juxtapose that to the below example, which demonstrates the difference strong data visualization can make when reporting on your data.

When visualized in a graph format, it is much more clear to a client how the portfolio companies are progressing positively in areas beyond investment returns. In this example we can see that Company 5 is held at cost but exhibiting strong revenue growth and that despite a poor MOIC, Company 2 is developing positively as their company head count has increased substantially. Using visuals like this one allows a manager to highlight sometimes overlooked metrics. Metrics like job creation can often help demonstrate positive community or societal impacts of portfolio companies and embody the ‘doing well by doing good’ mantra.

Management Changes

A management change is a common tactic for private equity managers when they take control of a portfolio company. But how do they show clients the effectiveness of a somewhat contentious strategic decision? Often, mentions of management changes are veiled or relayed through a euphemism.

“We right-sized the company corporate structure”

“We brought in our own team to guide and facilitate new strategic direction”

Vague and nebulous statements like these can give a client pause as management volatility can be unsettling for a business. But if a change is necessary, it is important that GPs convey that information, and its impact, in a clear way. Managers are better off being clear about their decision-making and action-taking with regards to portfolio companies. The example below shows how a manager can transparently relay a management change to clients while also highlighting the positive impact it had made for the company.

Visualizing Portfolio Contribution

Data visualizations like the Total Value Curve below help clients understand and internalize how each individual investment contributed to the overall performance of a fund. To support this visual, a manager can provide supporting commentary about how performance gains are spread across the portfolio and how this reflects the strength of the team’s deal-making ability and value-add.

Looking at the big picture (literally)

As a GP who is engaged with their data on a daily basis, we understand that it can sometimes be difficult to take a step back and understand what the client wants to know. You might be focused on a very minute portion of the data that is important to you and your analysis, but if you cannot articulate that metric and its impact on an investment’s value, your reporting will fall flat with your investors, or worse, frustrate and confuse them. By using data-storytelling, and a narrative and data visualization structure to your reporting, you can highlight how that nuanced metric is driving performance in a way that a client can understand and feel good about.

About Cobalt GP
Cobalt GP is a business intelligence software platform developed by Bison, an innovative technology company based in Boston, MA. Over 80 private fund managers across buyout, credit, real estate, energy, and venture rely on Cobalt GP for its powerful portfolio analysis, automated reporting, and industry-specific data visualization capabilities.

About Andres Ramos

Andres is a content strategist for Cobalt GP. Prior to Cobalt GP, Andres spent 5 years at Cambridge Associates (CA), a Boston based investment consulting firm. Andres worked as an Investment Associate focused on the private equity and venture capital industries in CA's Global Investment Research group.

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