As terrible as the Covid-19 crisis has been, it has forced private equity players to accelerate their adoption of technology to replace previous practices. This will likely be the impetus needed for full implementation across the industry.
Technology & software solutions
Providing investors with a compelling digital experience is becoming a key component to the service private equity managers offer their clients. When looking to implement such service, managers need to be aware of specific dimensions which can help support their efforts to deploy this successfully for their benefit and that of their investors.
As private equity managers become more comfortable adopting technology, a measure of which has been accelerated by the Covid-19 crisis, their needs are also developing further. The increased adoption of public cloud services is leading to more data-warehousing which in turn results in more in-depth analysis of that data. However, as these firms progress along the technology adoption timeline, they must ensure their cybersecurity is air-tight.
The secondary market is on an upward trajectory. More institutional investors are looking to streamline their holdings and take an active approach to portfolio management. This, in conjunction with travel restrictions resulting from the Coronavirus pandemic, has led to investors becoming more comfortable with the concept of trusting an online platform.
Simply put, portfolio performance data is a GP’s most valuable asset. It is their record of achievement, their recipe for future success, and their best fundraising tool, all in one. That is why it is unfathomable that most GPs are still relying solely on spreadsheets, 30+ year-old software, as their primary tool for collecting, managing, and analysing their performance data.
When it comes to technology solutions, five to 10 years ago, private capital firms used to try to select a single software vendor to deliver all functional requirements across the front, middle and back office. This approach had limited success. Most vendors had strengths in certain areas but key weaknesses in others. None could deliver all functionality well.
“What is now proved was once only imagined” – William Blake, Auguries of Innocence, 1803
The private equity industry remains a staunchly conservative, relationship-driven industry, fuelled by the operational and financial expertise of deal teams to identify the right companies to invest with and transform.
Evolution Equity Partners has led a Series C round in Quantexa, a decision intelligence software company that enables organisations to make better decisions, raising a further USD64.7 million in funding.
JP Morgan AM and Hazeltree partner to provide cash and liquidity management for private fund managers
JP Morgan Asset Management and Hazeltree, a provider of cloud-based treasury solutions for investment managers, have partnered to deliver a unique and integrated cash and liquidity management platform to private equity, private credit, real estate and infrastructure funds.
Software and technology-focused private equity investor Thoma Bravo is to acquire Majesco, a provider of cloud insurance software solutions for insurance businesses, in a deal valuing the company at USD594 million.