GPs could potentially close "better deals" in the new normal - PEWlive day one

Deal

The pandemic has made investors ask a different set of questions, and shown how a ‘hybrid-approach’ will increase efficiency in the new normal, according to Sebastian Junoy, speaking on the operational due diligence panel at the PEWlive event today (2 September).

The second panel of the day, ODD, centred around some of the benefits the current tech acceleration has led to, including the migration of data to the Cloud and time efficiency gains, which in turn leads to GPs potentially being able to close better deals.

“The ‘hybrid-approach’ will be one of the main developments in terms of ODD that we didn’t have before,” said Junoy. “It will increase efficiency because you can do a lot more upfront, do more triage, and be more specific because people are willing to engage more upfront. Hopefully it will lead to less time wasted and better decisions in the end,” he added. 

Some of the downsides of conducting due diligence remotely include missing out on the soft, intangible factors such as understanding alignment; the reasons for doing something a certain way, as well as understanding the power dynamics of a team – what is unspoken can easily be missed virtually. In the words of Tim Wainwright of Eight Advisory UK, “presence matters.”

The panel which featured Sebastian Junoy of Headway Capital Partners, as well as Wainwright, also covered how the social media aspect is now fundamental both in terms of how a company is viewed and for its growth strategy, and that social media themes are becoming increasingly important in today’s interconnected environment.

The first panel of the day, Succession Planning, focused on how to protect the integrity of investments regardless of shifts in the management team, and maintained the importance of GPs keeping a solid focus on the core strategy, rather than deviating too much from the stated business plan.

During the Technology Impact panel  – the final session – Paul Winter of Moghrabi Family Office discussed the significance of firms taking a step back when adopting new technology and asking themselves: “what do we actually need?”, in order for it to be implemented effectively. VC investor Andre Pieenaar of C5 Capital said that one of the main issues today is cyber security risk; that private equity firms want to know the level of risk in their portfolios.

Other discussion points included that it's vital to give teams time to change internal tech processes, as well as relationships being forged in the backdrop of less travelling in the future. As a VC investor, Pieenaar said that many within the VC space were already up to speed with the required technology when the pandemic hit.