Data analytics transforms portfolio monitoring, leading to smart portfolios

Published on September 25, 2025 by Harshit Jain

In the high-stakes world of private equity (PE) and venture capital (VC), decisions influenced by data is the new norm for effective portfolio monitoring. By leveraging advanced technology, PE&VC firms could gain more in-depth understanding of their investments, enhance performance and reduce risk.

Data-driven decisions are the outcome of data analytics that focus on the following:

High accuracy – Data analytics provide exact and practical insights, minimising the likelihood of error and improving accuracy

Reducing risk – By combining historical analysis and current trends, firms can gain a better understanding of potential risks and take timely action to mitigate them

Enhancing performance – Consistent monitoring of key performance indicators (KPIs) enables enhancing portfolio performance and achieving better returns

Progress in portfolio monitoring

Technological breakthroughs have modernised portfolio monitoring tools, making them more efficient, user-friendly and sophisticated:

Machine learning (ML) – ML algorithms can be used to automate data collection, providing real-time insights and predictive analysis, and highlighting patterns and trends in real time.

Generative artificial intelligence (AI) – AI helps create customised reports with available data almost instantly, making the process of report generation much more transparent.

Cloud-based solutions – Cloud-based portfolio monitoring is gaining traction due to the access it affords, flexibility and cost effectiveness. A report by Bizfeed predicts that by 2026, 75% of investment firms will use cloud-based portfolio-monitoring solutions.

Market dynamics

Decisions fuelled by data in portfolio monitoring have increased, and the global market for data-driven portfolio monitoring is expected to be worth USD24.09bn by 2032, growing at a CAGR of 10.30% from 2025, according to Data Bridge Market Research.

Data analytics can lower operational costs by up to 20% by reducing manual intervention and improving efficiency, according to an article by Neowork.

Data-driven decisions improve portfolio performance by 20-25% as firms make more trend-based informed decisions, according to an article by KPMG.

Nearly 78% of PE&VC firms globally have started using data analytics in portfolio monitoring, according to an article by BCG.

Trends and outlook

Advanced analytics – Advanced analytics such as predictive modelling and sentiment analysis would enhance the efficiency and accuracy of portfolio-monitoring tools.

Wider AI capabilities – With AI capabilities increasing, more sophisticated data could be handled, generating deeper insights that would lead to better decisions.

Increased focus on economic social governance – With environmental, social and governance (ESG) responsibilities increasing, portfolio-monitoring tools have become smart enough to incorporate ESG metrics, ensuring sustainable and responsible investing.

Role of blockchain technology – Due to its ability to decentralise, blockchain technology ensures data integrity and transparency. It enhances security by restricting unauthorised access and providing reliable and secure platforms for portfolio management.

Global expansion – With cross-border investment increasing, portfolio-monitoring tools are adapting to different regulatory environments and market conditions, providing global coverage.

Role of data security and privacy in portfolio monitoring

As PE&VC firms adapt to the data-driven environment, ensuring data security and privacy becomes mandatory. Effective portfolio monitoring enhances not only investment performance but also security measures such as data encryption by integrating advanced security protocols while complying with regulations and safeguarding valuable assets.

How Acuity Knowledge Partners can help

We offer a fully integrated solution designed to enhance the portfolio-related experience for PE&VC firms with our in-house proprietary tools such as Foliosure that provide accurate data, tracking, bespoke reporting and real-time insights.

By combining our deep industry knowledge and analytical expertise, we empower our clients to benefit from a streamlined approach to portfolio management, helping them make informed decisions and unlock greater value from their investments.

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About the Author

Harshit Jain

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Harshit has over 4 years of experience Fund Administration and accounting services. His knowledge expands to multiple asset classes analysis, Market Research and Compliance reporting.