Author: Josh

ESG Benefits: Supporting Increased Corporate Responsibility

Posted on September 23, 2021 by - Deal & Pipeline Management

Measuring ESG Benefits to Companies, Communities, and Funds

At Altvia, we believe that running our business in a responsible, beneficial manner requires serving the needs of all our stakeholders—including clients, partners, employees, and the communities where we operate.

While the “impact investing” movement has long recognized the positive effects that investment projects can have on society, the private equity industry as a whole is growing increasingly focused on concepts like environmental, social, and governance (ESG) and corporate responsibility.

ESG Investing: Doing Good Is Good Business

Following sustainable management trends that began in Europe, and the example of leaders like Patagonia founder Yvon Chouinard, American businesses are recognizing that “doing good” is good business. They’re also discovering that companies that aspire to be socially beneficial usually are.

Structuring investments under the guidance of ESG principles creates true win-win situations. While firms always conduct a risk management analysis and consider whether a deal is going to provide long-term ESG benefits for a community and its environment, increasingly, funds and institutional investors are including ESG  characteristics in how they evaluate investments at both the company and fund levels.

But there are lingering questions: How do we characterize those guidelines and how do we quantify being responsible?

The True Measure of Success with ESG

The goal for ESG investing isn’t avoiding controversial sectors like firearm manufacturers or strip-mining operations. Instead, it’s being able to demonstrate the beneficial impact that a fund’s investments have on the larger community while being profitable for direct stakeholders.

Measuring these results requires new metrics and analytics. But smaller companies, historically, are unaccustomed to recording and tracking these figures. That’s typically because they lack the resources, time, or knowledge to do so.

Even if a company has ESG investing data, there’s no standard to serve as a reliable yardstick for success. There’s also no format in place to report ESG stats efficiently. That’s something the industry is working on and a challenge where advanced private equity technologies such as Altvia’s can play a crucial reporting and communications role.

European funds and asset managers have already made great progress in these fields. Today, it’s clear that ESG investing is here to stay.

Highlights From “Future Proof Your PE/VC Firm” Virtual Event

Posted on September 22, 2021 by - Private Equity Technology

Recently, Altvia Chief Revenue Officer, Kjael Skaalerud, hosted a virtual event,  “Future Proof Your Private Equity or Venture Capital Firm” focused on issues like the role technology can play in a firm to keep the organization operating at peak performance, the technology maturity curve and how firms can assess where they are on it, and hurdles to technology initiatives. 

The session, which was recorded for those who couldn’t attend, also provides actionable insights on how to move forward with implementing technology.

We’re in a period where many records have been set in private capital markets—from VC dollars invested to the total number of IPOs, etc While that’s great news for the industry, it also means that firms that historically based their success on “ a great team” and being “connected” within the industry are feeling some pressure to up their game.

Implementing advanced technology is a great way to do that. As Hugh MacArthur, global head of PE at Bain & Coobserved, “Speed to insight is everything in private equity.”

The Panelists

Along with Kjael, two industry experts provide their insights on how to future proof your firm.

Jennifer Meyer is a director at Greenspring Associates. She’s an expert in technology companies, particularly SaaS-based services, and leads Greenspring’s technology operations team. 

Richard Grajewski is VP, business development at Huron Capital Partners, where his primary focus is deal origination. 

Frameworks – The Role Technology Can Play in a Firm

Grajewski says what’s key for his firm is knowing what deals are coming to the market before getting the “teaser”. In the current market, if the teaser is your first knowledge of a deal, you’re already behind. 

Huron Capital gets ahead of the curve by establishing and maintaining relationships with what he calls “centers of influence” in the market. Screening deals and educating the market on his firm’s investing criteria are also important to him. 

“Having a powerful CRM is vital to everything Huron Capital does.”

He also notes that the firm works closely with Altvia to understand and adopt best practices for gathering and assessing data and setting goals for their operations. 

Skaalerud points out, many firms suffer from “blank canvas syndrome,” meaning they want to implement technology but don’t know where to start, so Altivia’s guidance can be extremely helpful.

Meyer addresses how technology helps firms meet a need for something they’re all pursuing:  actionable outcomes and delivery mechanisms. She points out that her firm has $15 billion in assets under management and 21 years of data that’s helped them achieve that level of success.

But with all that information, the question becomes: “How do you manage that amount of history and data in a meaningful way that gives everyone high confidence in what’s being outputted and delivered across the firm?”

She notes technology enables the people who rely on it, and who ultimately have to make important decisions. If you view solutions from that perspective, you’ll be better positioned to achieve the outcomes you’re looking for. 

You’ll get better adoption if you’re clear about technology’s role and about the fact that it can give your firm a competitive advantage.

Skaalerud agreed, sharing Altvia’s observation of firms that embrace technology tend to be less siloed, with teams that engage fluidly and productively with each other. 

Skaalerud asks about the importance of high-value work and that repetitive, mundane tasks are minimized as much as possible. Meyer some people see “chaos” in a firm’s operations, but emphasizes the importance of taking a closer look at what’s going on and being able to change perspectives from strategic to tactical and back again easily. This allows you to identify the issues that impede the fast and effective delivery of data across the organization.

One example that Meyer gives is data entry. It’s a critically important task but one where errors can occur if people aren’t focused on their work. That focus can be improved by giving the people doing the work what she calls “more high-value outcomes” and the accompanying boost in job satisfaction and engagement across the organization.

Gajewski points out that one of the best measures of the effectiveness of a system is how well it handles exceptions, and that people who know more about how processes affect a firm are better positioned to react properly to unfamiliar scenarios. His firm uses technology, in part, to isolate the variables that can help them be more effective. 

Skaalerud asks how firms—especially those that have been in business for decades—can go about analyzing data over the long term.

Grajewski responds that Huron Capital Partners has historically been “good” at this, but that with an assist from technology, they’re on the path to being “great” at it. He goes on to explain that his firm has created automated dashboards with Altvia’s help that can assist them in assessing the impact of certain factors on their success—things like intermediary, sector, geography, executives or service providers involved, etc.

The Tech Maturity Curve – Understanding Your Current State & How to Progress

Another conversation involves tech maturity in firms and their well-known resistance to change since there’s a certain amount of lift that’s needed to reach a point where the return on their technology investments is clear. 

Meyer mentions identifying true technology “champions” within the firm is vital to success, as is achieving small wins that begin to build momentum toward full adoption of tech solutions. She emphasizes the importance of automating things like reminders so that team members can focus on other tasks.

The group tips for successful technology implementation, including:

  1. You need an overarching strategy
  2. It’s important to “eat the elephant one bite at a time.”

Watch “Future Proof Your Private Equity or Venture Capital Firm” in Its Entirety

“Future Proof Your Private Equity or Venture Capital Firm” provides a wealth of information both for firms that have cutting-edge solutions in place and for those considering a technology initiative. 

View the virtual event in its entirety here.

The Case for a More Data-Driven Approach to Talent Management

Posted on September 20, 2021 by - Private Equity Technology

Cracks are forming around Private Equity’s (PE) traditional process of creating value. The method of “buy, gut, flip, and repeat,” is no longer seeing the success it once had. These days it’s more challenging to grow portfolios by simply “buying smart.” Hold periods for investee companies have multiplied, and operating groups have increasingly limited time and resources. A data-driven talent management approach requires active monitoring, reshaping, and upgrading management capabilities from the ground up.

Strategic transformation of talent and leadership across the portfolio is the new, sustainable way of creating value.

Creating More Value Through Talent Management

PE can create long-lasting value through talent management as a core competency at the portfolio level. From an investor’s perspective, a strong team of talent can add as much as 30 percent to a company’s market valuation.

To create value from talent management, PE firms need a new approach to leadership and talent. The talent management process needs to start early and be very active. Acquiring and developing top talent needs to be a priority. Management capabilities don’t transform overnight, and firms that adopt tools to help with monitoring and tracking are sure to pull ahead.

Diversity Pays Off

Not only is it essential to acquire and develop top talent, but having a diverse workforce is also highly beneficial. By assembling employees of varying backgrounds and perspectives they generate a variety of insights, ideas, and superior returns.

PE is notorious for lack of diversity. There are too few women and people of color serving in lead investment roles. A Preqin study found that only 17.9 percent of PE employees worldwide are women. Another study by Deloitte and Stanford University found that the private investment industry has low racial and ethnic diversity. The lack of diversity is even more astounding if you strictly look at leadership positions.

For further proof that having a diverse team is beneficial, one study in Harvard Business Review found that diversity improved financial performance among venture capital professionals. Another study from Boston Consulting Group found that diverse teams were a key driver of innovation and produced 19 percent more revenue. The bottom line is that diverse teams make organizations more robust and increase profit.

Tools of the Talent Trade

PE and Venture Capital firms are now responsible for building their own competitive leadership teams and those of their portfolio companies. It sounds like a big job, and it is, but PE firms that lean on data and technology to help them in their talent transformation will reap the benefits. 

Most firms use LinkedIn as a talent management tool to reach and find future employees. Nearly 630M business professionals gather on LinkedIn and it is the most effective place for B2B marketers to engage with decision-makers, influencers, and leaders.

Some firms subscribe to LinkedIn Sales Navigator to deepen their capabilities. Sales Navigator includes improved search capabilities, visibility into extended networks, and personalized algorithms to help firms reach the right decision-maker. 

These are great tools, but the problem with using LinkedIn or LinkedIn Sales Navigator on their own for talent management is that these systems don’t connect to the firm’s CRM. Ultimately, there is not a great way to gather and track information on both the CRM and LinkedIn at the same time.

That’s all changing with Altvia. Altvia was explicitly built for PE and Venture Capital to help firms seamlessly evolve and manage the complexity that comes with growth. Leadership teams can assemble and track the data needed to manage talent with a direct integration between LinkedIn and Altvia—allowing talent management data to show in the CRM. 

Data isn’t siloed in one system, but shared for better visibility, internal communication, and improved efficiency. From storing candidate resumes to tracking specific attributes such as salary demands, potential start dates, and skills, firms have the advantage of both systems to build a talented and diverse team that will add value. 

Need to fill a bunch of roles? By using technology tools like Altvia, firms can keep track of all of the roles they are hiring for, both internally and externally at portfolio companies. Pipeline tracking keeps it all organized and tracks due diligence of candidates. Hiring becomes more streamlined, efficient, and effective. 

Conclusion: Transform the Talent Management Process with Altvia

Gone are the days when firms could simply leverage their finances, slash costs, and expect to unleash value. It’s become common knowledge that attracting and developing a talented and diverse team will add long-term value. By combining the power of LinkedIn and Altvia, firms have the tools that they need to build powerful teams and ultimately, a highly desirable portfolio.

Are you Interested in seeing how Altvia can help your firm transform the talent management process?

ESG Investing Creates a Better Bottom Line for PE Firms

Posted on September 13, 2021 by - Deal & Pipeline Management

It’s no secret – to remain relevant in today’s market, businesses need to think about, and take action toward, how they’re making an impact on the planet. After all, sustainability is the new aspiration for companies, and the key to achieving it is developing enhanced ways to measure ESG initiatives, performance, and overall impact.

However, measuring ESG performance is easier said than done. So how can PE/VCs ensure they’re on the right track? It starts by determining how to measure the relative value of any given ESG metric and understanding the pitfalls to avoid misleading investors along the way. 

Understanding ESG Performance

At its core, ESG performance is a measurement that shows how a company is performing against set criteria of ESG (environmental, social, and governance) values. This measurement is used by investors to fuel decision-making and compare brands against competitors. ESG performance is also a leading factor consumers and employees use to determine if a brand is aligned with their values before deciding to do business with or work for them. 

When it comes to comparing ESG ratings, three main approaches are used by investors: 

  1. Comparing ratings to peers managing comparable portfolios
  2. Leveraging a standard industry benchmark index
  3. The investor’s history and internal data

However, each approach comes with caveats. The appropriateness of each depends on an investor’s particular situation, including the risk profile of the portfolio, the composition of stakeholders, and any fiduciary obligations. 

Comparing ESG performance is not an apples-to-apples game, though. When comparing specific ESG performance indicators, investors are often misled, given how much ratings can vary by industry, company, and value point.

Measures that Mislead Investors

Because one of the biggest challenges in measuring ESG performance has been the lack of consistency surrounding industry benchmarks and performance measurement metrics, investors face challenges when evaluating performance. This becomes increasingly tricky when comparing the performance of one company to another, including competitors. 

Whatsmore, most ESG data available is often self-reported by companies, which means there are significant gaps in data availability, not to mention somewhat biased information. 

Measurement also often fails to provide insight into messy underlying processes. For example, data shows that adding women to executive teams will produce better outcomes. However, that data point doesn’t take specific outcomes into account, such as decision-making that reflects diverse perspectives. This is why investors must look beyond the numbers to learn how, why, and under what circumstances the decisions came about. 

Performance Pitfalls to Avoid

It’s recommended that firms follow a “zoom in, zoom out” approach. This means “zooming in” to focus on better integrating ESG factors and their values within the portfolio while also being sensitive to issues of concentration, tracking errors, and risk. By “zooming in,” firms can create risk frameworks that pinpoint ESG threats and failures. By “zooming out,” they can better understand issues and underlying processes while gaining insight into bigger-picture strategies and opportunities. Without a broad and narrow look at investments, PE/VCs risk missing opportunities to improve performance. 

Finally, it’s imperative to maintain a single source of truth for ESG benchmarks and metrics. A trusted, reliable data source that arms management teams with confidence in their numbers and transparent reports for investors is critical to effectively measure ESG performance.  

Track and Measure Your ESG Performance with Altvia

To track and measure ESG performance with confidence, your firm needs to rely on the right tools to effectively transform your ESG commitments and data into transparent reports for your stakeholders. 

To turn your goals into an operational ESG strategy and effectively measure your progress along the way, a tool like Altvia can help. From evaluating risks, to monitoring competitor insight and internal performance, Altvia’s software can arm your firm with transparent, quantified metrics on the impact of your ESG initiatives. 

To see how Altvia can supercharge your firm’s ESG initiatives and performance tracking, contact a member of our team to start a conversation.

PitchBook Report Provides Insights on Private Fund Strategies Through H1 2021 Sponsored by Altvia

Posted on August 24, 2021 by - Uncategorized

Investment industry stakeholders are always eager to get data about recent past periods so that they can use it to inform their decisions going forward. That’s especially true given what the industry (and the world in general) went through in 2020. And no organization is better positioned to provide that data than PitchBook. Recently, Altvia commissioned a PitchBook report—Private Fund Strategies Report Q2 2021 on the results of different private fund strategies for the first half (H1) of 2021. It provides analysis and performance results for:

  • Private equity
  • Venture capital
  • Real estate
  • Real assets
  • Private debt
  • Fund of funds
  • Secondaries

The report also includes excerpts from a Q&A session with Altvia SVP of Industry Solutions & Strategy Jeff Williams, plus lists of top funds of different types by size.

Below are some highlights from the report.

Industry Overview

Looking at the industry from a high level, PitchBook notes that “fundraising in H1 2021 was ahead of H1 2020, with $545.4 billion versus $531.9 billion, and even further ahead of H1 2019, which raised $436.8 billion.” And this is true even though fewer funds were raised in 2021 than in 2020 or 2019. So, we saw more money going to fewer but larger funds.

The report also provides a table of year-over-year changes by each of the private fund strategies. For example, private equity funds raised $479.6 billion which was a YoY decrease of 17.9% on a fund count of 598, which was a YoY decrease of 27.4%.

Fund “Step-Ups”

As PitchBook explains: “When a fund manager raises a follow-on fund—also known as a successor fund—it often believes that a target larger than the previous fund is merited due to increasing deal values, a shift upmarket in strategy, or even just the feeling that bigger is always better and a downsized fund would be a poor signal to send the marketplace. Allocators may also hold the cynical perspective that it grows the basis on which management fees are charged. The difference in fund size between a fund and its successor is the step-up.”

The report includes a very visual representation of step-ups for different types of funds and how they’ve tracked from 2006 to 2021.

Private Fund Strategies: Overviews and Graphical Data

The core of the Private Fund Strategies Report Q2 2021 provides an overview of each fund type along with data in the form of graphs and charts. The visuals make it easy to see metrics both at a point in time and as trends.

It’s engaging information punctuated by several very interesting observations, like:

  • Globally, venture funds raised a staggering $88.6 billion through H1 2021, bringing the 12-month rolling average to an all-time high. At its current pace, we anticipate 2021 global VC fundraising to eclipse the record $136.6 billion set in 2018.
  • Perhaps it is the pandemic, but real estate appears to be in a funk lately, at least as it pertains to fundraising.
  • Private debt fundraising kept a steady course in the first half of 2021. Low interest rates, subdued default rates, and the longer-term pivot toward alternative strategies aided allocators in committing $62.1 billion across 66 vehicles.
  • H1 2021 is off 2020’s record-setting pace for secondaries, but the $32.8 billion closed through June is still more than any prior calendar year, aside from 2020 and 2017.

Top Funds by Size

The Private Fund Strategies Report Q2 2021 concludes with lists of top funds by type and size. It’s fascinating to see how many of the most well-known funds are doing—EQT IX, Copenhagen Infrastructure IV, Ares Capital Europe V, and many others. Get your copy of this in-depth and informative report!

Get your copy!

PitchBook Report Details M&A Priorities for AI Industry Leaders

Posted on August 19, 2021 by - Private Equity Technology

It seems that artificial intelligence (AI) is constantly in the news for one breakthrough or another—not to mention predictions from industry observers on what those breakthroughs mean to a particular industry and how they’ll be used. But how are investors and tech giants like FAMGA (Facebook, Apple, Microsoft, Google, and Amazon) companies and others viewing AI and the innovators responsible for advancing its capabilities?

PitchBook’s report titled Tech Giants Pursue Inorganic Growth with AI provides insights. At a high level, the author notes that M&A activity in AI reflects the immaturity of the technology itself. In other words, we’re definitely not seeing its full potential. But despite deal counts and deal values in recent years that have been flat for VC-backed companies, there are suggestions in recent activity that leading users of AI may be ready to start investing more heavily in the technology.

An Industry Gaining Momentum: Highlights of PitchBook’s AI Observations

From Altvia’s perspective, some of the most interesting and important observations from PitchBook’s report include:

  • Tech giants have previously focused on investing in internal R&D initiatives and smaller tuck-in acquisitions and acqui-hires to fill gaps where needed. PitchBook surmises that this approach has been used to appease shareholders and prevent high losses and antitrust scrutiny.
  • Evidence of the incumbents putting significant resources into R&D includes the fact that they announce new products and research discoveries regularly.
  • Reasons for ramping up artificial intelligence spending include that some tech giants have fallen behind in certain areas that they have neglected. Apple’s AI acquisitions to bring its Siri product back up to par with other voice recognition systems is one example. Intel’s acquisition of Habana Labs to energize its own stalled AI chip design initiatives is another.
  • Deals of $1 billion or more have been limited to semiconductors and autonomous vehicles.
  • Microsoft’s $16 billion 2021 acquisition of Nuance, a company specializing in conversational AI, might be a sign of things to come. Notable is the fact that Nuance’s technology has demonstrated commercial traction in the healthcare industry, so it is more than a tuck-in-focused deal.
  • In another sign that AI-related acquisitions are heating up, human resources automation company Workday has acquired employee sentiment analytics platform Peakon for $700 million.
  • FAMGA companies spent $133.5 billion on R&D in 2020; total VC investment in North America in 2020 was $29.3 billion.
  • To assess the priorities of M&A leaders, PitchBook examined the acquisitions of 110 companies that stand out for their AI R&D. The results are summarized in an interesting bar graph for the years 2017 through 2021. [Link to the report again here?]
  • Horizontal platforms such as core software, natural language technology (NLT), and AI automation platforms along with consumer AI are the leading targets for industry leaders.
  • PitchBook analysts believe that “NLT is a faster-growing niche that carries greater commercial and strategic value to big tech companies in the medium term,” in part because both Microsoft and Alphabet have signaled that NLT is important to their future with new acquisitions and internal initiatives.
  • Public cloud hosting companies are rolling out verticalized AI offerings for industries like financial services, industrial, IT, and healthcare applications. However, they have made a few acquisitions to enhance related capabilities. Instead, they’re acquiring horizontal platforms and developing their own applications.
  • The possible ROI of AI acquisitions is still hard to gauge. This is putting downward pressure on valuations for AI startups and causing AI leaders to be hesitant about paying a premium for even the most promising startups, like Element AI.
  • The filling of gaps in the AI architectures of FAMGA companies continues to represent a significant opportunity for startups. 

We agree with PitchBook’s take that stakeholders can expect tech companies to make additional large acquisitions in categories that they have already clearly prioritized. And given the immaturity of the technology being acquired, it doesn’t appear that regulators will focus on antitrust issues.

Stay Ahead of the Curve With the Right Software

It seems the AI industry is “taxiing for takeoff.” Staying on top of industry developments and in touch with stakeholders requires purpose-built software. Contact us today to learn more about the Altvia platform—a solution that is as powerful as it is easy to implement.

Which Private Equity Software Implementation is Right for You?

Posted on August 18, 2021 by - Platform & Implementation Strategy

There are many software solutions on the market today that help fund managers track their deal flow and manage fundraising. It seems like each solution employs a different software implementation strategy ranging from an extensive and prolonged engagement with a consultant (on one end of the spectrum) to the software provider that just provides access to the software and says “Good luck!” (on the other end).

You could argue that each of those approaches has its advantages. A long period with a consultant means your team will get all its questions answered and have a good understanding of the software when you go live with it. Being handed the keys means you’ll have to fend for yourself, and that can prompt you to delve deeply into its functionality. But, of course, both methodologies have their drawbacks, too.

So, while selecting the right software is critical, evaluating which software implementation strategy is right for your firm is just as vital. In fact, as we noted in another blog, ensuring widespread adoption of your private equity software solution is crucial to your success. And if your software implementation doesn’t go well, you’ll face an uphill battle in getting people to use it and maximizing its value to the firm.

Off-the-Shelf Solutions

Our extensive experience with firms of all types and sizes has proven that a so-called off-the-shelf (OTS) solution—one that’s used as is, with few if any modifications—can be a good fit for organizations that have fairly standard business processes. OTS software may also be the right choice for your firm if you’re price-conscious and looking to get a good amount of functionality for your dollar.

Software implementations with OTS solutions tend to be fairly straightforward. Because the same system is delivered to all customers, the software implementation process tends to be standardized and well-documented.

And the lack of customized functionality doesn’t have to be negative. Many firms find that there’s value in getting their software implementation and data entry completed quickly. For one thing, this approach minimizes implementation-related costs. Plus, enabling teams to get productive faster can mean increasing your revenue faster. So, in effect, the software pays for itself more quickly.

In addition, rapid software implementations can lead to greater buy-in from users, as they start seeing positive results and want to capitalize on that momentum.

Then, as your organization grows or users recognize the potential value in expanding the system, you can customize the solution or add functionality. Of course, this strategy requires that you buy a solution that’s scalable and expandable in the first place.

Software Implementation for Customized Solutions

If a private equity software solution will be highly customized, the software implementation is, by necessity, more involved. An expert or team of experts must work with users first to understand their needs and then modify the software to meet them.

This approach can be very beneficial if your organization has unique processes. It means you’re not forced to fit round pegs into square holes, so to speak. That said, when done right, this approach involves looking at your existing processes from a new perspective. Yes, the software will be modified to support whatever workflows you choose, but it’s wise to first ensure that those workflows make good business sense and that they’re clearly documented, well-understood, and universally practiced.

Then, when it’s time for the actual software implementation, there’s a tremendous value (and comfort) in being able to rely on the skills and experience of people who do software implementations for a living. They bring with them the latest industry-specific best practices and can ensure that your team is able to capitalize on them.

Expert software implementations are, not surprisingly, more costly. However, in terms of the total cost of ownership, paying for an expert-led software implementation can result in a system that provides greater value for a longer period.

Investing in a New Solution

As the private equity industry gets continually more competitive, firms have a greater sense of urgency when considering technology that can give them an edge. However, rushing to purchase a solution and conduct a software implementation is never a good idea. Firms that take the time to evaluate both the new system and the software implementation process always come out ahead of those that make snap decisions without considering the big picture.

You want to be sure that your firm is in the former category!

A Call to Action for The Next Generation of Private Equity

Posted on August 16, 2021 by - Private Equity Technology

Private equity is a competitive industry. The bar for investment returns is higher than ever, and the need to innovate has never been greater.

One way firms are getting ahead of the curve is by investing in technology – from fund-raising software to CRM platforms that allow you to communicate with LPs on an individual basis.

As part of our ongoing mission to educate those looking for career opportunities in private equity, we’ve compiled this list of resources that cover all aspects of how technology can be used to help the next generation of private equity professionals succeed.

1. How are you investing in technology to grow your business?

2. Which tech trends do you see fundamentally changing the way private equity operates?

3. How can a good CRM system increase LPs’ satisfaction with their relationship with your firm?

At Altvia, we see these as some of the core questions to ask yourself when thinking about how to best position your firm and yourself for future success.

Investing in technology to grow your business.

Here are some things to consider when investing in software and technology for your private equity firm: – Can you stay competitive? Private equity firms are increasingly looking at the competition and how they can keep up with the industry’s demand for best-in-class performance from investors, companies, and portfolio managers.

A key area of focus is digitizing client experiences while also giving them a seamless experience across all platforms. That’s the key to creating a phenomenal LP experience.

Tech trends fundamentally change the way private equity operates.

As we have discussed, the private equity world is changing and adapting to better meet investor demands. That includes an increased focus on technology in general and software solutions specifically. – What are your future needs?

A key consideration when deciding what to invest in is assessing your firm’s current state and how it will evolve over time with respect to industry trends, changes in strategy, or organizational structure.

Building a best-in-class team of people that is constantly able to do more with less, through automation and data-driven insights is key to maintaining your current edge.

How a good CRM increases LP satisfaction.

Our SVP of Industry Solutions and Strategy, Jeff Williams explains,

“Better understanding your network, your relationship with that network, being more efficient at servicing and communicating with that network, and having the data to service and support that network are significant differentiators that many fund managers are still not taking advantage of. I expect that we’re in the early innings of this phase, and if some of the B2C markets that were early adopters of these technologies are any indication, the returns will be impressive and create outstanding differentiation for those who adopt them.”

Investment firms need to be able to adapt and change in order to stay competitive. One way of doing this is by using software for managing the relationship with investors, automating administrative tasks, or getting data-driven insights on how an investment strategy performs.

Why Private Equity Deal Teams Need Technology

Posted on August 12, 2021 by - Private Equity Technology

As everyone in Private Equity understands, a deal isn’t an event that happens when an agreement is signed. It’s a process that evolves over time and culminates in a mutually beneficial relationship. Deal flow management gives your deal teams the visibility it needs to track the data you have on a potential investment, including:

  • Deal information
  • Fund details
  • Due diligence

The efficient management of deal flow is one of the biggest factors in a firm winning or losing deals. Consequently, it’s not something that should be left to chance.

A Private Equity CRM is Essential for Deal Teams

In order to be successful, deal teams have to be able to find any resource they need quickly. That means storing and maintaining data in one easily accessible customer relationship management (CRM) system.

Long gone are the days when a PE firm could consistently win deals using a random collection of Excel spreadsheets and documents that “lived” in digital and printed form in countless locations. 

Today, the firms that thrive are those whose deal teams leverage highly coordinated and orchestrated activities among team members to find targets, perform due diligence, and close deals.

Ensuring that those activities can take place efficiently is especially challenging in the wake of COVID-19. 

Many firms are choosing to maintain the remote-working model that they were forced into by the pandemic, which means they need tools for effective data sharing now more than ever.

Technology That Supports Deal Teams in the Due Diligence Process

While all aspects of deal flow management are important, the due diligence process is crucial to reaching the right conclusions and making profitable decisions.

A single source of action helps deal teams assess strategy, operations, and marketing/sales capabilities—three vital aspects of a company—and get answers to key questions, like:

  • What is an organization’s position in its market? Are they the leader? The fast-rising newcomer? A solid, middle-of-the-pack performer?
  • How optimized are their operations?
  • Are there ways to reduce the amount of working capital needed, get more value from existing assets, and better manage costs?
  • How well does the company market itself, pursue new business, and close sales?

With make-or-break decisions riding on so many questions, a centralized source of clean, current data is an absolutely vital tool for deal teams.

Our AIM CRM platform provides that specialized data repository. It allows teams to:

  • Standardize the deal funnel with recognized stage milestones
  • Ensure there is clarity on next steps
  • Customize due diligence requirements

Plus, the fact that information can be added to AIM not only from a desktop computer but also from a mobile device helps ensure that data is clean, fresh, and available in a timely manner.

As Volume and Velocity Increase, Deal Teams Must Keep Pace

The term “digital transformation” is widely used in business today. Nowhere is this concept more relevant than Private Equity. With many thousands of PE firms worldwide and many thousands of deals closed annually, competition is fierce. 

Aggregate deal value in the U.S. alone has reached nearly half a trillion dollars in recent years.

As a result, deal teams are having to work faster and smarter to stay competitive and continue delivering good risk-adjusted returns. They’re finding that the right technology can help them collect, transform, search, assess, and perform predictive analytics on data in order to gain an advantage over firms that are still relying on outdated, manual processes. 

Plus, a cutting-edge system allows deal teams to see how much is left in a fundraising process so they can plan accordingly.

Considering a Technology Upgrade?

If your deal team has been using the same deal flow management processes for many years, it can be difficult to envision how those procedures could be enhanced. The best way to understand the potential for improvement is to learn more about the advanced systems that are available today.

Gathering “intel” on them—even if your deal team isn’t ready to make a change yet—positions you to leverage these systems when the time is right for your organization.

Learn more about how Private Equity deal teams can benefit from a technology stack with our free guide, Winning Deals in a Hyper-Competitive Market.

10 Reasons Excel Falls Short for Fund Managers

Posted on August 11, 2021 by - Fundraising Strategy

The foundation of fund management is accessible, accurate information. To effectively implement an investment strategy and manage portfolio trading activities, fund managers need to be able to act quickly and seamlessly in collaboration with others on their team.

Many firms are still stuck in the Excel spreadsheet days. Unfortunately, in today’s fast-moving markets and with growing assets under management, Excel just doesn’t cut it. As firms quickly outgrow their use of Excel, they are moving to what we consider the foundation of the work that Private Equity and VC firms do, a sophisticated CRM.

Customer Relationship Management (CRM) systems are the base of a modern technology stack. And since the technology that firms use are only as good as their data, it’s critical to have a robust CRM is a single source of truth that supports:

  • Key workflows
  • Contact management
  • Relationship mapping
  • Deal, fundraising, and pipeline tracking
  • Automation of key activities (e.g., emails and task assignments)

We understand that adopting new technologies and the processes to support those technologies can be difficult. But we have seen first-hand how proper technology in the form of a CRM, like Altvia, can superpower fund management. We’ve also witnessed how old-school tools like Excel fall short. While Excel spreadsheets are good calculators, they don’t satisfy the needs of today’s fund managers.

Here are ten areas where Excel falls short for fund managers.

1. Collaboration

Excel files tend to be built for specific purposes, such as an investor list for newsletter emails, or a targeted fund list. Disruptions to collaboration take place with this approach. Often, the information is pushed out of the “master” list but never comes back with corrections or updates. As a result, multiple copies of the same list are maintained throughout the firm. It’s also difficult to establish a consistent list since multiple people can’t work on the same file simultaneously.

2. Data integrity

When there are multiple people working on the same file, that file often becomes corrupt. We’ve all been there, when the Excel spreadsheet gets returned from a colleague and the formulas are broken. Or, because of the back and forth sharing of the file across different software versions, the file becomes fully corrupt and therefore unusable. This situation requires someone to revert back to an older version of the file and lose all of the recent updates. It’s an incredibly frustrating, time-consuming, and inefficient reality of Excel spreadsheets.

3. Storage

Unless your firm has solid processes in place that everyone adheres to, the issue of file location can become a big problem. As different members of the teamwork on and update an Excel file, it might get saved on someone’s machine, and not where it should be stored for everyone to access. This issue creates confusion and wasted time when people have to hunt down the latest version because it’s not stored in a central location.

4. Control

Excel files can get really big and complex. With so many connected cells and formulas, over time, it becomes difficult to diagnose the cause of an error. Fund managers can spend hours just hunting down the wrong character in a formula that’s causing problems.

5. Connectivity

With information stored across different sheets and files, it’s difficult to see a holistic view and connections in the data across all of the sources. This issue creates gaps in insights and slows down a fund manager’s ability to make effective decisions.

6. Stability

Many fund managers who use Excel store connected information across multiple, interconnected sheets. Over time, this becomes precarious. Each sheet gets more complex, the connections become brittle, and the stability of the data and information is less reliable.

7. Access

Unfortunately, Excel imposes constraints on different users depending on their license, operating system, etc. This makes file access difficult at times and due to constraints in a file, these access issues can block users from getting to the information they need to do their jobs.

8. Reporting

An important part of your job is reporting. When using Excel to manage data, it can take a full day or more to put together a report that answers all the required questions of the firm. Additionally, without structured and normalized data, advanced reporting is nearly impossible.

9. User Experience

Many fund managers have lots of experience with Excel. They were likely trained on the technology at some point in their education or careers. Yet, the user experience can still trip up the savviest Excel user. With the speed that fund managers need to move at, there’s no time to fight with a pivot table, or Google errors happening within a macro.

10. Human Capital

Managing work in Excel is a big waste of human capital. In the time spent trying to bend and shape Excel to get it to work for their jobs, fund managers could be out hunting, building relationships, and staying on top of industry trends.

The switch from Excel to a purpose-built technology for fund management is a huge boon, not only for the individual but also for a firm. As an example, Crestone Capital saved hundreds of hours of work by moving away from Excel and onto Altvia.

With increasing assets under management, Crestone sought out a system to support business growth, create operational efficiencies, and better serve its stakeholders.

The team was using a set of disparate systems including Excel sheets, PDFs, and Microsoft Dynamics. It was cumbersome to gather all client data into a central location, and the group had difficulty leveraging Microsoft Dynamics across the organization to accomplish basic tasks.

In their move to Altvia, using the CRM and Investor Correspondence, Crestone was able to streamline operations, free up team time, and improve investor relationships. Read more about the experience here.

Altvia helps private equity firms move past Excel and operate more efficiently, securely, and effectively. If you want to learn more about how Altvia can support your firm, request a demo.