Three Industry Leaders Partner to Launch Private Markets Data Standardization Initiative

In Brief:

The private markets industry faces a critical data fragmentation problem as assets surge from $5 trillion to $13 trillion over the past decade, with projections reaching $20 trillion by 2030, yet varying definitions and metrics across providers complicate decision-making for investors managing increasingly complex portfolios. Rich Carson, Managing Director of Private Investments at Cambridge Associates, and Jerry Smith, Private Markets Product Strategy Lead at Mercer, appeared on Private Markets 360° to discuss their firms' groundbreaking collaboration with S&P Global to establish industry-wide data standards and create a comprehensive data clearinghouse. Speaking from their respective positions overseeing billions in private market investments and serving thousands of institutional clients globally, both executives outlined how this partnership aims to transform communication between general partners and limited partners while addressing the urgent need for consistent taxonomy across the rapidly consolidating vendor landscape.

Big Picture Drivers:

• Market Growth: Private markets assets have nearly tripled in a decade, creating unprecedented complexity in data management and analysis

• Industry Consolidation: Massive M&A activity among data vendors has fragmented solutions while increasing demand for standardized approaches

• Sophistication Evolution: Institutional investors are moving beyond basic fund-level metrics to demand granular deal-level data and operational insights

• Transparency Demands: Limited partners increasingly require comprehensive risk assessment across public and private exposures in their portfolios

Key Topics Covered:

• Partnership Structure: How S&P Global's data reach combines with Cambridge Associates' benchmarking expertise and Mercer's global client base

• Data Quality Philosophy: The trade-offs between transparency and completeness when sourcing information directly from general partners versus public sources

• Market Evolution: The shift from basic venture/buyout categories to complex strategies including private credit, growth equity, and hybrid structures

• Technology Integration: Creating unified platforms that serve both GP reporting needs and LP analytical requirements

Key Insights:

• Data fragmentation costs: The proliferation of data providers using public sources creates incomplete, stale information that lacks the rigor needed for sophisticated investment decisions, with some data lagging multiple quarters behind direct GP reporting.

• Scale complexity: A standard portfolio of 10 funds across 50 companies with 40 attributes generates 20,000 data points regularly, underscoring why investors need robust technological infrastructure to avoid analysis paralysis.

• Market structural shift: The number of US public companies has halved since the mid-1990s while private companies increased 40%, fundamentally reshaping where institutional capital can find diversification and growth opportunities.

• GP-LP relationship evolution: General partners are responding to sophisticated LP demands by creating new strategies, exploring emerging geographies, and introducing innovative structures like semi-liquid funds and continuation vehicles.

• Quality versus transparency trade-off: While public data sources enable fund-level transparency, they sacrifice completeness, timeliness, and classification rigor that comes from direct GP partnerships with aggregated, confidential outputs.

• Collaborative advantage: The combination of actual private markets investing experience from sophisticated institutional clients creates a unique competitive position for developing solutions that meet real practitioner needs rather than theoretical requirements.

Memorable Quotes:

• "Despite the fact that there has been a proliferation of Private Markets data and service providers, I still think there's still an important opening in the marketplace" - Rich Carson, explaining the rationale for the three-way partnership despite increased competition

• "They no longer can simply look out the window to gauge market conditions. They're looking for a reliable weather report to anticipate future trends and make informed decisions" - Jerry Smith, describing how institutional investors approach private markets data today

• "The golden source material for Private Markets data, we've always believed that Cambridge is the financials for the total fund directly from the GP" - Rich Carson, defending the partnership approach to data sourcing over public information gathering

• "Transparency is great for some use cases, but it's got a real cost" - Rich Carson, addressing the limitations of publicly-sourced private markets data

• "In the private debt space, often called out that you win by not losing" - Jerry Smith, explaining why loss rate metrics are critical for due diligence in credit strategies

The Wrap: 

This collaboration represents a pivotal moment for private markets infrastructure, as three industry leaders leverage their combined expertise to address data standardization challenges that have become increasingly urgent amid explosive asset growth and vendor consolidation. By prioritizing direct GP partnerships over public data scraping, the initiative promises to deliver the completeness and timeliness that sophisticated institutional investors require while creating a unified framework for communication across the entire private markets ecosystem.