What do you do if your Private Equity analysis reveals conflicting information?

1 Verify Sources

When your analysis hits a wall of conflicting data, start by verifying the sources. Scrutinize the reliability of each piece of information. Are the reports you're reading up-to-date and from credible sources? Sometimes, the conflict arises simply because one source is outdated or less rigorous in its methodology. Ensuring that you're working with the most current and authoritative data can often resolve discrepancies and give you a clearer picture of the investment landscape.

3 Cross-Check Data

It's crucial to cross-check data when inconsistencies arise. Look for alternative data sets or methodologies that can confirm or refute your initial findings. This might involve deep-diving into financial statements, market research reports, or even conducting your own primary research. The goal is to triangulate information from multiple angles to isolate the root of the conflict and arrive at the most accurate conclusion.

5 Revisit Objectives

Sometimes, conflicting information can be a sign that you need to revisit the objectives of your analysis. Are you asking the right questions? Are your investment criteria aligned with the data you're evaluating? It's important to ensure that the goals of your PE analysis are clear and that you're not trying to fit a square peg into a round hole by forcing data to match preconceived notions.

6 Risk Assessment

Finally, consider the implications of the conflicting information on risk assessment. In private equity, understanding and managing risk is paramount. Conflicting data points could indicate higher risk, which may affect the investment's attractiveness. It's essential to evaluate how these discrepancies impact the overall risk profile of the investment opportunity and adjust your strategy accordingly.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?