If you’re working at a private equity firm, you’re no stranger to an Excel spreadsheet. According to data from iLEVEL Solutions, nearly three in four private equity shops use spreadsheets to collect and analyze portfolio company data. And if you’re using Excel, you have to be aware of the risks that come along with it. Like the fact that a whopping 76 percent of spreadsheets contain inaccurate data that’s either mis-keyed or misstated.
But rest assured, at least the human error of hitting an incorrect key in the private equity universe has not yet had the kind of disastrous effects it has had on the banking world. You might remember JPMorgan Chase’s $6.2 billion trading loss or Barclay’s mistaken purchase of 179 toxic deals. At the end of last month, news broke that another catastrophe was nearly added to that list when a junior banker at Deutsche Bank accidentally sent $6 billion to a US-based hedge fund client after mistakenly processing the order as a “gross figure” instead of as a “net value.”
Luckily, Deutsche was able to recover the money the next day, but be warned: with these “fat finger” mistakes, your capital can vanish in a flash, leaving wallets slimmer than ever.