73 Strings is a global FinTech shaping the future of how illiquid assets are analysed, valued, monitored, sourced, and transacted utilizing augmented intelligence solutions for financial valuation and related performance analytics. CEO and Co-founder Yann Magnan chats to Private Equity Wire about the sector’s opportunities and challenges for the coming year.
PEW: Where do you see the most significant opportunities for growth in the coming year?
I believe LPs will continue/start again to allocate more capital to Private Equity as the industry has a consistent history of great returns. And I believe significant extra growth will come from retail investors finding ways to allocate more and more capital to Private Capital as well, for the same reason.
With the latter, greater demand for reporting and transparency will come as well.
PEW: How do you see LP appetite for private equity shifting in the future?
I believe LPs will start again soon to allocate more capital to Private Capital. And doing so, they will prioritise GPs that can present history of strong performance, as well as robust, frequent and fast processes, including on the reporting side, so that they can better manage their own risk. GPs who will be able to provide these will have a further edge.
PEW: What have been the biggest drivers of growth within your business?
A combination of market volatility, more and more diverse sources of capital flowing to the industry, and regulation. Market volatility is a strong driver for LPs to try and understand real time how their capital is allocated between private and public. Real time is a strong driver for technology, and our data collection, monitoring and valuation technologies significantly reduce the time and effort required for GPs and their auditors to get these activities done.
Retail investors require deeper and more frequent reporting. Higher frequency of reporting is best addressed by middle office and valuation technologies that 73 Strings offers.
Regulators around the world have continued to pay more attention to the Private Capital industry in general, and in particular, to the issues surrounding valuations. Our unique valuation technology facilitates compliance with various regulations by proposing a consistent and structured framework for these activities.
PEW: Are there ongoing or planned regulatory shifts for private equity firms to be mindful of?
As Private Equity is continuing, if not accelerating, on its growth journey, regulators around the world will continue to place more scrutiny. Valuations and valuation process in particular, will attract more attention.
PEW: What role can technology play in portfolio risk management?
Cloud technologies will enable to collect and analyse vast amount of data to extract more intelligence out of it, whether at the portfolio company level, at a sub industry level, or at a portfolio level. GPs who will harness these technologies for their processes that require granular data points (like valuations) will be able to slice and dice this information, and compare and benchmark, at the click of a button, bringing further intelligence to investment teams when they invest, and when they manage the portfolio. The other way around, when this data is spread across tens or hundreds of models each at different dates and unstructured, there’s not much you can do with that…
Yann Magnan Chief Executive Officer, 73 Strings – Yann has more than 25 years of experience in the Corporate Finance/Financial Advisory industry and working in and with the Alternative Investment Funds industry at the global level. At 73Strings, he is responsible for defining strategic initiatives for the business, as well as overseeing key relationships and operations. Yann currently splits most of his time between New York and London.
