Roundtable: Meeting the future challenges of data

August 9, 2024

Data roundtable participants (left to right): Dean Tower, GP Fund Solutions | Andrew McLennan, Nuveen | Martin Betts, NTrust Infotech | Miguel Angel Bermudez, CBRE Investment Management | Ainun Ayab, Citco | Jonathan Avery, Legal + General Investment Management

Real Asset Media convened six experts to a roundtable debate about data. What became clear is that, despite challenges, the importance of data to real estate cannot be ignored. Nicol Dynes reports

The real estate sector needs a step change to make the most of the opportunities offered by advanced data analytics, experts agreed at Real Asset Media’s Data Uncovered: Meeting the Future Challenges of Data roundtable, which took place at CBRE Investment Management’s offices in London.

“The real estate community has yet to understand what data really means and the quality of the data needed,” said Martin Betts, vice-president of commercial real estate for EMEA at NTrust Infotech. “It’s a process that doesn’t just help the investors, but benefits everyone each step of the way.”

“The real estate sector needs to step up, as the hedge fund industry went through this process 10 years ago,” said Ainun Ayub, global product head for real assets at Citco. “We’re on the cusp of a big change because everyone, from fund managers to real asset managers, is pushing in the same direction now, looking at the whole system holistically.”

‘We’re being asked to collect, normalise and validate increasing volumes of data, but clients get data from multiple sources and that creates challenges.’

Martin Betts, NTrust Infotech

Senior management teams are not required to become technology experts. Instead, they can focus on running their property portfolio, but they must understand the need to gather, evaluate and validate big data, and call in the experts as required. What is needed is a framework and some rules of the road that can be agreed upon.

Formats and systems

“We’re being asked to collect, normalise and validate increasing volumes of data, but clients get data from multiple sources and that creates challenges,” said Betts. “Initial due diligence in ensuring data quality is crucial, as there can be no quick fix. It can be slow and meticulous process but this does get progressively easier, and the cost/benefit analysis is clear.”

These challenges are exacerbated by the need to join the dots between formats and systems that don’t talk to each other. “There are different systems and providers and you need to knit all these types of data together,” said Jonathan Avery, head of technology and data – real assets, at Legal & General Investment

But a relentless focus on the provenance and quality of data will pay off, because starting with incorrect data means mistakes will be perpetuated along the chain. “Data quality is crucial because using the wrong data is so damaging to the whole process. Data will become ever more relevant, so it is clear that we need good data,” said Miguel Angel Bermudez, director of global analytics at CBRE Investment Management.

‘We’ve found it’s difficult to establish what is a true source. AI is very powerful, but you still need to validate the data being used.’

Dean Tower, GP Fund Solutions

Good data is the starting point, because there is nothing that machine learning or artificial intelligence, powerful as they are, can do if the relevant data is missing, incomplete or defective. “The quality of data is a real issue,” said Dean Tower, director of GP Fund Solutions. “We’ve found it’s difficult to establish what is a true source. AI is very powerful, but you still need to validate the data being used.”

Once the optimal data has been collected and validated, predictive analytics is the next step. “It’s a quick and easy process to use the information and the data you have and apply this to investment opportunities,” said Betts.

The real estate sector may have been slow off the mark, but change is happening fast and the direction of travel is clear. “We expect a massive ramp-up in digital capabilities across the Real Estate investment industry in the coming years,” said Dr Andrew McLennan, managing director and global head of technology for private assets at Nuveen, the $1.1 trillion asset manager.

“The chief technology officer role will continue to be ever more influential as business leaders look to them to enable commercial innovation and scale, and they will ultimately have the same decision-making authority as a chief financial officer or chief operating officer.”

‘Data quality is crucial because using the wrong data is so damaging to the whole process. It is clear that we need good data.’

Miguel Angel Bermudez, CBRE Investment Management

Consistency and privacy are two of the biggest issues to deal with when using data, experts agreed. “Data privacy is the biggest challenge, as we need to protect our own and our clients’ data,” said Bermudez. “We create in-house tools, emulate what’s out there but for our own use, and we have used tools for a while to find answers to specific questions.”

As the amount of data that need to be gathered, processed and validated continually increases, more issues arise about how to ensure data protection.

“We’ve got a good handle on data, but there’s a long way to go,” said Avery. “There’s more work and more due diligence to be done on privacy and data protection. It’s a journey to get everyone involved and understanding what their role is and what their individual skillset can bring to the whole.”

To achieve the best results it is important to steer away from a silo mentality and encourage people in different roles and with different expertise to cooperate and cross-pollinate ideas.

Data consistency is crucial

Consistency of data is also crucial to allow meaningful comparisons to be made. The goal for each company is to bring all data into a consistent, standardised format. But at present there’s no consistency across portfolios or across regions.

‘Beware thinking AI can solve every problem, because the nature of technology is that it’s ever-changing. So you need to work with the existing architecture, but keep building and adding on.’

Ainun Ayub, Citco

“There will never be agreement on a global standardisation template that works for everyone, you have to have a flexible approach to this problem” said Betts. “You don’t enforce your templates on your partners. To combat this at NTrust, we continue to develop scripts and update our AI engine so any template style can be ingested and standardised to each companies unique requirement.

“Efforts to standardise the world are fruitless. There will never be a time when everyone wants to drive the same car, or when the same tech solution will work for everyone.”

“Platform connectivity is the best we can hope for,” added Citco’s Ayub. “We’re all at different points of a digital journey but, for everyone, the benefits to be gained are exponential.”

Technology is becoming increasingly powerful, but with power comes responsibility. “Managing data responsibly is crucial,” said Ayub. “As systems and platforms get more integrated, then a mistake can be catastrophic. Beware thinking AI can solve every problem, because the nature of technology is that it’s ever-changing, so you need to work with the existing architecture, but keep building and adding on.”

‘We’ve got a good handle on data, but there’s a long way to go. There’s more work and more due diligence to be done on privacy and data protection.’

Jonathan Avery, Legal + General IM

In a fast-moving landscape, it is necessary to keep up with changes and innovations, whether it is machine learning or artificial intelligence.

“AI is happening so much faster than any other transformational technology – the impact will be as great as the inception of the personal computer or the smart phone, but will happen in only years rather than decades,” said McLennan.

“Technology, in my opinion, is much more than just IT and should not be thought of as a shared service or support function, but as an equal with the business and being critical to an organisation’s survival. In future, we’ll talk about a pre-AI world and a post-AI world. Expect radical change – 2024 will be remembered as the year of data.”