Global Outlook 2024 Report


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Navigating risk while seizing opportunity

Validus Risk Management: Best Risk Management Software Provider – Though the start of the pandemic in 2020 may have rocked the industry, many private equity firms went on to have a stellar year, with some raising record funds. As fund-raising activity and deal-flow increased, more general partners (GPs) sought support from their partners. The growing focus on risk management also led to more clients looking for risk advisory, hedge strategy execution and technology solutions.

“A key topic in the PE industry is the need for better technology solutions, both to enable PE managers to improve controls, risk management activities and other corporate functions, but also to improve reporting to limited partners (LPs),” highlights Haakon Blakstad, Chief Commercial Officer, Validus Risk Management.

LPs are increasingly asking questions about risk management and they are demanding more granular and timely information as part of performance reports. In addition, both GPs and LPs face the challenge of private assets having only recently become a mainstream allocation. This, in Blakstad’s view means, “the industry is suffering from some growing pains when it comes to flow of information, streamlined operations and ordinary corporate functions.”

To this end, with its focus on risk management, Validus enables managers to excel, both in terms of providing robust and practical risk management solutions and also in terms of the access, monitoring, analysis and reporting of data. In fact, the firm has continued to expand on its technology platform by adding modules for monitoring, reporting and analytics. This was not only done across risk management but also to keep track of assets, liabilities, and corresponding hedges. “We have also been looking to expand on our platform so our PE clients can provide additional support to their portfolio companies. 

“Aside from technology, our advisory and capital markets divisions have been busy meeting PE clients’ requirements for risk analysis, optimised hedging strategies, and assistance with fund finance facilities,” Blakstad notes. This drive to continue improving and expanding the service it provides is critical to the firm’s objectives.

Validus had a positive 2020, finishing the year with a 30 percent increase in revenue and a nearly 100 percent increase in headcount. A large part of the increase in staff was in the technology department. This was part of planned investment to further boost its risk management software.

The firm is also looking to grow in terms of geographical reach and range of clients. Blakstad notes: “We are opening another office in North America this year, New York, and will most probably be looking at Asia next. We are also seeing an increased demand for our service from LPs. This is predominantly in Europe and North America, so it represents an area of both growth and diversification for us. Growing our client base adds value to our existing clients, as the insight and sharing of best practices improves further.”

He expects PE to continue doing well: “Funds will keep being raised and LPs will keep allocating more to this and other private asset classes. We will continue to support these clients through our consistent investment in technology and our desire to seek out problems and challenges we can solve for them. We will continue to live by our company strapline – Navigating Market Risk.” 

Haakon Blakstad, Chief Commercial Officer, Validus
Haakon Blakstad has more than 15 years’ experience in financial services and capital markets, having previously worked in front office roles at Visa, Hoare Capital, and Société Générale. During his career he has built strong relationships with institutional investors and alternative investment managers globally, and in recent years has been instrumental in the delivery of risk management solutions to managers with several hundred billion dollars in combined AUM. Haakon holds a BA with honours in Business Management from Newcastle University.

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