CFOs could be underestimating investors’ data demand

An Intertrust Group survey shows gaps in expectations regarding how often to make performance and ESG data available.

Private capital CFOs could be underestimating demand from fund investors for certain data, according to a recent survey from Intertrust Group.

The service provider, which asked about demand for the next decade, found that more than 40 percent of surveyed investors want live data for portfolio performances. In contrast, only about 30 percent of surveyed CFOs – responses came from the leaders themselves or their direct reports – gave the same answer.

Intertrust noted there is also a gap between investors and CFOs regarding environmental, social and governance data availability. It found that about 55 percent of investors want either live or daily ESG updates, which is 10 percentage points more than what CFOs gave.

The firm suggested two possible reasons for the discrepancies. From the CFOs’ sides, it noted that they may perceive investors’ expectations as having been shaped by their earlier experience with more liquid markets, and that they will adjust as they get used to private capital.

The company said another possibility, from investors’ perspectives, is a desire to have easy data access for reporting and monitoring, rather than acting right away.

The international survey included 320 validated responses for the CFO side and 110 investor responses.

Data demand may drive technology and hiring

Intertrust noted that both CFOs and investors see more technology investing as a solution for data needs, building on an area of agreement from last year’s survey.

CFOs expect to utilize both in-house and third-party assistance in response, the survey shows. Nearly 72 percent of respondents said that, over the next three years, they expect to hire people with technology expertise to their in-house finance teams. For the same period, the firm also noted that CFOs will increasingly rely on outsourcing for technology expertise, with about 61 percent replying that they would turn to it in order to complement their teams’ skillsets.

Investors were more likely to favor CFOs increasing their in-house teams (69 percent) than their counterparts (61.3 percent). Meanwhile, CFO respondents were more likely to express support for increased outsourcing (39.7 percent) than investors (32.7 percent).

Despite investors being less favorable to increased outsourcing, Intertrust noted that “there is a recognition that in-house investment and outsourcing can go hand in hand.” It also found that 31.8 percent of investors support CFOs keeping their current mixes between in-house and outsourcing, a figure that stood considerably higher (43.4 percent) among CFO respondents.