Category: Private Equity Technology

If there’s a type of business that can ignore or refuse to implement new technology as advances are made and still be successful, we don’t know what type of business that is. It’s certainly not private equity firms.

In our fast-paced, highly competitive industry, firms that aren’t using purpose-built, state-of-the-art systems are at a distinct competitive disadvantage.

And firms that remain at the back of the pack don’t last long.

Private Equity Technology and Differentiation

Competition in the private equity space is continually reaching new extremes. This ongoing escalation forces firms to reach new levels of operational excellence, personnel optimization, and data management.

How do they support this continuous evolution? They stay vigilant, constantly scanning the horizon for the next technology solution to break new ground and enable improved operations. But operating more efficiently and effectively is really just a means to an end. The “end” in this case is creating clear differentiation from competitors.

Is your firm the only one of its kind in the industry? It may have some of the best people and have an impressive track record of success, but no, it isn’t particularly unique in the services it offers. However, the combination of the skills, experience, and insights of your team with the communication, data management, and other capabilities of the right technology solution—now that’s something that can set your firm apart from the competition.

And that differentiation can make all the difference in attracting investors and closing deals. Why? ‘

Because the stakeholders you interact with are just as busy as you are. They don’t have the time or resources to assess each one of the countless “middle of the pack” contenders. They identify a few that stand out, do a little research, and decide how to move forward. If you aren’t in that select group of finalists, you’re out of the equation.

How Firms Leverage Their Technology

How do firms use technology to get ahead?

For one thing, they use a CRM to manage their contacts. That’s the foundation for getting the right communications in front of the right people at the right times. They also make it easy to share resources securely with stakeholders, which increases transparency and helps create and nurture trusting relationships.

And underpinning all of these advantages is the implementation of efficient workflows. The easier it is to get day-to-day tasks completed, the more time there is for finding innovative ways to engage stakeholders and close more deals.

From “Nice to Have” to Necessity

Not long ago, switching to a better CRM or an email program with enhanced features was something firms did if they had the time and capital to invest in those upgrades. Today, those tools and others that increase productivity and improve stakeholder relationships clearly have moved into the “Mission Critical” category.

But the good news is that it’s easier than you may think to implement a suite of private equity technology solutions. The first step is learning about what’s available.

Private equity software is a great way to consolidate your data into one centralized, easily accessible system. In order to migrate your data into a private capital software tool, you first need to consider the source and format of the existing data.

Taking the time to carefully assess all of the different types of data you’ll be merging before you begin migrating data will help ensure that records are imported correctly and that the process flows smoothly.

Giving Flat Files Dimension in Private Equity Software

Many of our clients come to us with basic data such as names, companies, and contact information within a very flat database file. This might be an export from Outlook or a spreadsheet. 

“Flat” for example, means each contact has a company name listed, but there is no hierarchical relationship within the database allowing you to look at a company record and see all the contacts within that company.

In other words, it’s accurate data but not particularly useful data in its current format.

When data comes from a flat file, there is more planning and work involved in determining which fields go into which tables. 

For example, if a firm wants to have a field for web addresses, often they’ll store that information on a contact record. But individuals don’t typically have their own websites—at least not for business purposes. That’s something usually associated with an organization. Consequently, the Website Address field should live on the account record.

Thinking through these types of data relationships is critical as you prepare for data migration. While everyone on your team may understand your data hierarchy the way it is today, that doesn’t mean it should remain that way. If you’re upgrading to purpose-built private equity software, you want to be sure you’re able to maximize the benefits of that system.

Fields Specific to Private Equity

If you’re getting into data tables more specific to private equity—things like fundraising, pipeline, and investments—you’ll need to make similar decisions around the data you’re tracking currently in your private equity software and which table to associate the different records with.

For example, should the “Close Date” field live in a potential pipeline record or the investment table?  Or maybe it should exist in both. 

If that’s the case, you’re going to want that information to be automatically copied from one table to another to ensure data integrity.

Normalizing the Data

When you’re importing data for private-equity-specific tables like those for fundraising or portfolio management, you’ll want to normalize the data. Normalization is the process of ensuring that data is formatted the same way. For example, if you import some dollar amounts like $20M and some as $20,000,000, your data will be inconsistent. So, you should pick a format and standardize it.

Also, when you’re normalizing data, it’s important to remember that some organizations use different variations of their name. For instance, the company Application Experts often goes by App-X. Consequently, before importing contact and account information for people associated with that company, you’ll want to make sure that all variations (there may be several) are standardized to the same name on all records.

Deduplication: A Vital Step Before Importing Data 

Deduplication, or the removal of duplicate records, is perhaps the most important aspect of a clean import and the most often overlooked. This is particularly important if you’re importing records from the Outlook address books or spreadsheets of your team members since it’s very likely that multiple people in your organization will have the same contact person in their address books.

And a word of caution here: Many organizations are inclined to import data and then deduplicate it because they just want “to get all the data in there” as a first step. However, it’s much better to deduplicate and clean up your data as much as possible before the migration.

The most successful private equity firms today are upgrading to integrated software suites and technology systems. From an increasing need for scalability, transparency, and security, to optimizing business processes in order to save time, resources, and money, private equity technology solutions are proven to help firms grow and thrive.

Most firms have already adopted technology to a degree. However, non-integrated or disparate solutions can lead to issues of their own. So-called “swivel chair processes”—manual entry of the same information into different systems—cause significant strain on a firm’s time and resources.

In addition, increasing industry regulation requires greater transparency. And moving data to and from CRM systems and online storage requires digital security measures that are continually evolving to address new threats.

How can firms overcome these challenges and get ahead of the competition? They have to do more than implement new private equity technology. They have to adopt the right technology.

Purpose-Built and Integrated Technology

Innovators solve problems, whether they’re developing solutions in private equity technology or in any other field. Rather than just addressing symptoms, companies like Altvia search for root causes in order to improve systems from the ground up.

Exploring underlying issues often reveals that key segments of a firm’s core requirements aren’t being met. These symptoms can include a lack of transparency and security, poor user experience, issues with time and resource allocation, and an inability to scale. A little research can also reveal the high cost of supporting inefficient systems.

When a firm is experiencing even one of these issues, it can have a far-reaching impact both internally and externally. And we’re not just talking about it taking a little longer to complete tasks. The inability to address stakeholder needs efficiently and effectively can result in a firm losing lucrative deals.

Fortunately, properly integrated technology can solve even the most deep-rooted issues. For example, a well-designed CRM solution that’s purpose-built for the private equity industry and combined with integrated correspondence and LP portal solutions can dramatically improve how a firm interacts with stakeholders.

That includes:

• Demonstrating transparency
• Increasing the security of online resources
• Saving time and effort for users with intuitive navigation
• Providing scalability to accommodate rapid growth
• Reducing long-term costs

What’s more, implementing state-of-the-art private equity technology solutions can help a business position itself as an industry leader, strengthen its reputation, and close more deals. Stakeholders need to have confidence in the firm they’re dealing with before they commit to a project, and using private equity technology rather than a random collection of generic systems shows them that you’re focused on meeting their needs.

Finding The Right Solutions

Many firms begin to look for new solutions once internal pain or external pressure reaches an apex. This turning point drives awareness of the need for change and prompts firms to research solutions in order to find the right provider.

However, there’s no need to reach a pain threshold before starting your search—and every reason to assess your options in advance so you’re ready to make your move. To get started, first assess and document your firm’s operations and the private equity technology solutions required to support them properly.

Next, look at your current systems. How are they working for your team internally and for your external partners and investors? Is your team spending too much time moving information between systems? Do you need greater visibility or transparency for your investors? Create a functionality priority list for your firm and then use it as you search for new solutions.

Adopting Technology Gradually

Keep in mind that a complete overhaul isn’t always necessary. It may be that simply integrating a communications tool or investor portal, for example, will improve your operations significantly. Or finding a company that provides consulting and professional services could have a tremendous impact on your business.

The important thing is to keep in mind that there are private equity technology solutions available for any need. And a small investment of time, effort, and capital to find and implement new systems can produce an outstanding, long-term return.

For more information about how our private equity technology suite can help your firm, get started below.

What does differentiation look like for a fund manager? The answer to this question is complex, so let’s break it down. Previously, we covered the building blocks for processes in private equity technology that capture and warehouse data so that private equity firms can leverage new insights. 

Let’s look at how this foundation can lead to differentiation.

First, a definition: Differentiation is the result of efforts to make a product or brand stand out as a provider of unique value to customers in comparison with its competitors.

How Does This Translate Into Private Equity Technology?

In private equity, differentiation often stems from a firm’s “secret sauce” for how they source deals and find the best investment opportunities. This typically involves intricate processes and models to produce the best returns and ultimately differentiate from the competition.

While this has worked for many years, the process for achieving differentiation is changing. Many of our customers are in the process of raising their eighth or ninth fund and are continually looking for ways to improve investor perception and deliver more value-add services—on top of excellent performance. So, differentiation is not just performance but the entire stakeholder experience. 

This raises three questions:

1. What is the investor experience?
2. How are investors getting information?
3. How are their requests being handled and their needs met?

For example, is information being shared in generic spreadsheets or in branded, visually enhanced formats that are easy to understand and access? 

As a trusted advisor, Altvia looks at the big picture to understand what differentiation means to each customer. Then, we collaborate with them to establish the processes and systems/tools to help them achieve it.
Key point: Differentiation for private equity fund managers involves the entirety of the investor experience. What unique practices do you have that can help you stand out from the crowd?

Personalized communication

In managing the investor experience with the goal of creating differentiation, there are a number of variables that affect the dynamics of this relationship, from clear and consistent communications to reporting and transparency.

For example, optimal communication frequency, personalization, and tracking are among the key requirements for connecting effectively with investors and providing official investor documents and project updates.

LP Portal

Investors also expect 24x7x365 access to investment-related materials. They want to obtain information when (and how) it’s convenient for them. This is why an LP portal is so critical. It actually becomes the “hub” of the GP-LP relationship and a powerful resource for stakeholders.

For instance, fund managers using ShareSecure can securely post and share documents, multimedia presentations, and files with investors and then track materials that are viewed. This provides tremendous insight, enabling fund managers to see what’s really relevant and important to investors.

For your investors, this LP portal delivers a high-touch experience that’s all about ease-of-use. You’re empowering them to get what they need whenever they need it. This type of fund manager software benefits your team, as well, since you get fewer questions and requests that might otherwise strain your front and back office.

Reporting

Another component of the investor experience that’s a key part of differentiation is reporting—specifically, the types of data for which reports can be generated and how this data is delivered to the investor.

For instance, if quarterly reports are capturing the conventional data points and are delivered in spreadsheet format, the investor perception is likely to be that the service you provide is rather lackluster. It’s no better than they would receive from any firm. 

On the other hand, if your quarterly reports offer additional data points with new insights presented in a visually rich format, then there’s a clear opportunity to really engage the investor and create a positive impression. And impressing an investor not only has benefits today, it can create advantages for you down the road.  

This is how data management and fund manager software are evolving—enabling users to go “above and beyond” the static report to deliver data in an interactive format. This approach provides fund managers and investors new insights and can answer questions they didn’t even know they had.

Those “aha moments” can turn investors into vocal advocates for your firm!

How to lead for success with your Private Equity Technology

In the SaaS (software as a service) world, there’s always an ebb and flow of being proactive and reactive. In private equity, for many years, it was more along the lines of being reactive to information and data requests from investors. Fund managers would, over time, develop processes for meeting these requests and then add new technology to increase operational efficiency.

To really provide value to stakeholders and investors, fund managers have to be more proactive and deliver information in highly consumable ways. The value of the GP-LP relationship is based, in part, on the fund manager getting in front of requests using purpose-built fund manager software to provide crucial data that’s readily accessible, visually enhanced, and easy to understand. In short, fund managers have to be more progressive.

Providing meaningful information isn’t so much an act as it is a process. It involves operationalizing investment data, capturing institutional knowledge, and other practices that make a firm’s data rich enough for modeling and insight development. You have to have data points that go beyond simple stats.

By interacting with data in new ways and leveraging novel data sets, fund managers are able to make valuable discoveries and share them using impactful data visualizations. Now, the fund manager can ask and answer a whole new set of questions because of how the data is connected, presented, and made easy to consume. 

This strengthens investor relationships and helps set a firm apart. That differentiation is the reward for many years of creating and refining processes for how data is captured, warehoused, analyzed, and harnessed and for supporting those processes with the right fund manager software.

Just this morning, at a roundtable of IR professionals from well-known private equity and venture capital firms, I asked the question “how many of you are using investor relations software to score or predict the likelihood of prospects to commit to funds you’re raising?”

For a good ten seconds, it seemed as if there would be no reply whatsoever from the participants, but ultimately one brave soul did offer up something more or less equivalent to a manually calculated, somewhat arbitrary, and highly subject to interpretation method they use to figure how engaged a prospect is or how likely it is for a prospect to actually convert via commitment.

I left the early part of my career in venture capital not to shame how firms in this market behave, but rather to take advantage of an amazing opportunity to provide technology to these firms; the result of which would create opportunities for the firms themselves to use technology as a strategic weapon. It is my belief that there have never been greater opportunities for investor relations software to change the way PE/VC markets operate than there are today, and I want to start with this concept of predictive scoring, just one basic example of the application of technology.

Measuring how engaged a fundraising prospect is with any given GP raising capital is something that is proprietary; in a world where enrichment providers abound and help save us the mundane, manual entry of data that is objective, there’s simply no way for measuring engagement that doesn’t involve proprietary technology. Said another way: an enrichment provider like Pitchbook, Datafox, Preqin, or CapitalIQ is neither fit nor able, to tell you about the correlation between the messages and channels you use to the likelihood of closing the target. Not in terms of raising capital nor sourcing investment targets.

There are a number of firms we work with that arrive at this, however, and they do so via a modern mix of CRM (the source for proprietary actions taken and other data) and proprietary analysis that most often takes the form of modern analytics applications within the investor relations software. Where yesterday’s CRM is oftentimes seen as a management-driven hassle that users have no choice but to use, today’s CRM is an important provider of critical activity-based data and their associated outcomes, and which provides data to capable analytics applications that in turn start to help us understand patterns and correlations between activities and outcomes.

Let’s look at a basic example of this within the context of deal sourcing efforts. On the surface, every outbound firm has its deal sources, and a certain number of them will be considered “proprietary”. Many firms even have a surface-level assumption about how many of those deals — from a given source — they’re able to close. Note that I’m deliberately choosing to avoid using the word “understanding” in favor of “assumption”. The way I’m defining “understanding” in this case can be widely interpreted, and a simple number of deals closed is a perfectly fair definition by anyone’s standards, but it is my belief that there’s a definition that most firms would prefer. That definition considers the following:

1. whether those deals are deals that are likely to close to begin with
2. where deals from this source get stuck and/or how much time is spent to get them closed
3. whether there are efforts and activities that correlate to increasing the volume of deals from the given source (if it is so desired!)
4. whether the time spent on deals sourced from a given source is actually worth the all-important opportunity cost of lesser-considered sources

I’m attempting to stay relatively high-level with these considerations, but the last question above is the most important because it begins to consider whether there is a more effective use of the same resources. An easy way to think about this is to understand — through proprietary data — whether there is a “better” source for your efforts. In this case, “better” may not mean higher volume; it may mean a greater likelihood of success, or greater return on investment. More importantly, consider whether increasing the activity and engagement with that source has the effect of increasing the volume of higher quality deals.

Let’s pause there for a moment, and take the same proprietary data and analysis and port it to our understanding of fundraising efforts. Which activities lead to the highest conversion? Which attributes (location, size, mandate, etc) lead to an increased conversion with new LPs? Which messages are most effective? What is the typical engagement path and how long does it take to get to conversion? Which activities should we be taking and when?

But where proprietary technology and data begin to get extremely powerful is when we combine these two examples and begin to tell fundraising prospects a data-driven story about how our story is unique and how we’re differentiated in our ability to find the best opportunities. If that is where it begins, it is most certainly not where it ends; armed with the ability to understand our proprietary data and analysis of it, there’s no reason we can’t expect to begin to better understand how to win more competitive deals, both in terms of understanding deal dynamics and in terms of our ability to communicate what makes us differentiated when presenting to management teams.

In a time where the world is attempting to automate as much as possible, we must be careful to understand and distinguish between the time-saving automation efforts, and the invaluable proprietary tactics and data that can’t be automated. The combination of these two, and the insight therein is where true differentiation lies.

Step 1: Choose a technology partner that understands your business. 

The first step in our process is to understand your business. While we’re experts in software implementation for private equity, each firm is unique. You’ll want to customize the software to mirror your specific business processes.

When you’re selecting a data management system and/or a software implementation technology partner, it’s critical to work with a team that understands your industry and has implementation experience from projects with many other fund managers. 

It’s equally important to understand every software implementation is unique. It’s necessary to spend the time in the beginning tasking the right questions and really set the framework for your tech stack.

Step 2: Formulate a data strategy for your software implementation. 

While it’s tempting to jump right into implementing new technology, you need to take the time to focus on the underlying problems that private equity software is meant to solve. 

Taking the step to formulating your data strategy before the software implementation process ensures that the solution you purchase will be properly implemented and configured to solve your specific data problems and to produce the insights your team needs.

Identify the specific problems you need to solve by answering the following questions:

• Which parts of your operation would be best served by enhanced data management capabilities?
• Who are the stakeholders who will benefit from a data strategy? How will they benefit? Why will the strategy benefit them?
• Where are there problems in your ability to generate and capture data?
• Which processes could be streamlined by or be better-informed by data?
• What data would you like to have but don’t currently?
• Where could technology be used to address internal processes that may be generating data that isn’t currently captured?
• Where and how do you currently store data?
• How usable is your data in its current format?
• Who do you depend on to make your data usable?

Step 3: Implement, test, and refine your solution. 

Now that your internal team and technology partner has a clear plan for how the data in your new software is going to be used, it’s much easier to successfully install and configure the system for your team’s needs.

Depending on the type of private equity CRM you’re working with and the level of customization needed, this step could take anywhere from days to weeks. During this time, it’s important to start communicating the changes the software implementation will create to members of your organization, particularly those that it will impact.

You will want to work with a technology partner that has experience in the type of software implementation you’re executing and that has extensive project management experience. 

If they have that kind of background, they will lay out timelines and key milestones to ensure that the project moves forward efficiently.

As the software implementation comes to a close, your technology partner and implementation team will need to test the software to ensure it’s set up properly and that workflows are behaving as expected. This usually involves “dipping a toe” into the data to see how it reacts in the system, then refining configurations as needed.

The effective software implementation will involve working with small segments of your data first, rather than simply turning the system on and letting it run. 

This ensures that everything is functioning smoothly, there are no “breaks” in the data management workflows, and that you can pull from the system any information or reports you need.

Step 4: Conduct employee training and promote system adoption in your software implementation

Many organizations tend to think that software implementation ends once the solution goes live and there is evidence that data is being passed through it successfully. 

But don’t underestimate the need for team communication and training as the system is being rolled out. There is no substitute for having actual users “bang on” a system and place the kinds of demands on it that they will in typical work scenarios. 

Training that is personalized for your team is much better for promoting user adoption than generic training. Customized sessions help people understand how they will use the system in their everyday work, and makes them more productive from day one. 

It also helps ensure that employees put “clean” data into the system when they use it so that the software continues to work properly for your organization. You want the solution to deliver the same amount of value years from now as it does today!

Leverage Technology to Build Confidence in Any Investor Relationship

One of the questions we get asked frequently by our clients is, “What are private equity best practices and what is everyone else doing that I should be doing?” To answer it, we offer our insightful Private Equity Technology Assessment.

This evaluation is based on the Business Maturity Model, which outlines key components to consider as you invest in and evolve your use of technology within your firm.

The 10-minute questionnaire helps you assess your current technology state. It also enables you to identify priorities for the future, since the industry is continually changing and the firms that succeed are those that stay on the leading edge of the technology wave.

The Altvia Private Equity Technology Assessment looks at five main areas:

1. Technology
2. Data & Analytics
3. People
4. Process
5. Sponsorship

The technology portion focuses on your technology investment and how your use of technology has evolved over time within your firm. Knowing where you’ve been and how you got to where you are today makes it easier to plot a course to where you want to be down the road.

The part of the assessment that covers data and analytics assesses data quality and how you and your team leverage information to drive insightful reporting. Success in private equity today requires that you do more than simply gather data—you have to extract the maximum value from the information you collect and generate.

The area dealing with people evaluates your usage and adoption of technology across the various solutions you use and looks at whether you have people in leadership positions tasked with driving your technology strategy. Obviously, even the most advanced technology is of no value if it’s not being used.

The process portion of our Private Equity Technology Assessment reviews how well your business processes and your technology align. When sound methodologies are supported by the right technology, your teams and the stakeholders they interact with all benefit.

Last but not least, the sponsorship area looks at the involvement of your executive sponsor(s). The oversight and encouragement from people at the top level of an organization are essential to the successful adoption of private equity technology.

For each of the categories, the assessment helps you determine where you stand. Are you in the early stages or “developing”? Have you progressed past “developing” and begun moving toward “emerging”? Or are you even more evolved and considered “strategic”? And for those who are especially progressive, the label “market leading” is applied.

The key with any carefully crafted assessment is that there is no “right” or “wrong” answer. Rather, the results fall somewhere along a continuum. It’s important to understand where you are today with your private equity technology and what changes you can make to better support your business strategy.

In addition, it’s crucial to be aware that there is a symbiotic relationship between and among the five categories in our Private Equity Technology Assessment—improvements you make in any area give a positive boost to the others. So, firms that are market leaders are focusing on all five areas to ensure that they maximize the ROI on their private equity technology.

Why Private Equity Firms Need a Clearly Defined Technology Strategy

The private equity industry is at a technological turning point. Every year, limited partners are demanding faster, easier access to information, while general partners are struggling with how best to use technology to support these critical investor relationships. Savvy investors are now expecting that informative reports and other materials be available via email on-demand or at a particular cadence.

Survey results from an EY Private Equity Study indicate that “more than 65% of firms are currently investing in (or plan to invest in) emerging technologies such as digital data delivery, advanced analytics or robotics.”

Another study from KPMG found that only a handful of larger firms “have already implemented or are currently exploring the use of digital tools and D&A to provide the edge.”

In short, successful private equity firms are increasingly focused on technology transformation and improved investor reporting to meet new demands. Every year, the importance of advanced private equity technology is more widely recognized.

For firms looking to capitalize on private equity technology more effectively in areas like deal flow management, fundraising management, and investor relations communications, having a firm grasp on how well they are leveraging available solutions isn’t a luxury, it’s a necessity.

While many companies think of data as a tool, it might be more accurate for private capital firms to think of it as a valuable asset. In your data—the names, facts, figures, and other details you have been gathering for years or even decades—are relationships waiting to be formed and deals waiting to be made. And, of course, revenue waiting to be collected! Plus, even a small amount of high-grade data can contribute to multiple wins over time. In that regard, having clean data in your private equity CRM isn’t just valuable, it’s priceless.

But your success in achieving your business goals is largely dependent on the quality of that data. If you allow it to get “dirty” or outdated, you decrease your ability to make deals and raise funds—and in doing so, you inadvertently give your competitors an advantage.

If, on the other hand, you ensure that your data is always “clean” and current, you give your firm a competitive edge. It may be a big advantage or a small one, but if your data quality contributes to a win, it was enough of an advantage and well worth the effort required to keep your records up-to-date.

Give Your Teams the Data They Need in your private equity cRM

In order to provide your teams with the high-quality data they need to work effectively, there are four best practices you should use as you pull data into a private equity CRM solution like Altvia:

1. Only import essential data.

It’s tempting to have a “more is better” mindset regarding the data in your private equity CRM. However, the reality is that anything that doesn’t bring value to your team and your processes is simply a distraction. Forcing people to sift through huge volumes of data to find the most helpful entries is counterproductive since it only slows them down.

Ask yourself, “Will we actually use this data in the future?” before you import it. If the answer is, “Yes,” the follow-up question should be, “How?” If you are unsure, don’t import it.

2. Use tools for mass uploads and updates.

The more time and effort you put into getting data into your private equity CRM and keeping it current, the more you diminish its overall value. Altvia integrates with the Force.com platform, which means you can use the Salesforce Data Import Wizard to get information into the CRMquickly and efficiently. All you have to do is drag a spreadsheet into the tool, do a quick review/edit of the mapping, and start the import process.

Similar processes are available for updating information. If you leverage them, people tasked with data management have more time to focus on other business-building initiatives. Plus, using these kinds of tools helps minimize the human error that is common with manual processes. One keystroke error in a critical piece of data can be very costly.

3. Use validation and enforce data requirements.

The best way to ensure that the data in your private equity CRM is in the right format is to require that it be entered correctly on forms. By putting validation on form fields, you can prevent things like extra digits in phone numbers, alpha entries where numeric data is needed, etc.

Also, if a particular piece of information is required in order to make a record complete, ensure the form can’t be submitted without it. You don’t want to have an urgent need for information you thought you had, only to discover that you don’t and will have to scramble to obtain it.

4. Delete duplicate data.

Both incorrect and duplicate data are problematic for PE firms that are trying to keep their data quality high. However, the latter can be a more subtle problem, since any of the duplicates viewed individually may look accurate.

Be sure to “deduplicate” the data in your private equity CRM regularly. Also, check any data sources you are importing so that duplicates don’t skew your numbers and adversely affect your predictions.

Improve and Maintain Data Quality

If you’ve never focused on data integrity—or have let a high-quality database degrade—it will surely take some time and effort to get it back to a place where it is delivering maximum value for your firm. The same is true if you still rely on information that is scattered throughout your organization in spreadsheets, emails, and even handwritten meeting notes.

But the work to populate and maintain an advanced data repository is a wise investment in one of your most valuable assets, and one that will pay big, ongoing dividends. That is, as long as you make data quality a top priority and commit resources to manage your information properly.

The good news is that once you get into a rhythm of reviewing the data in your private equity CRM and taking any necessary action (updating it, deleting it, etc.), it isn’t a very time-consuming process. An hour or so on a regular basis is certainly worth a greatly enhanced ability to close deals. And, if your team commits to entering and updating data correctly the first time, you’ll have to spend even less time keeping it clean, accurate, and up-to-date.

See how our private equity CRM can improve the efficiency of your data management and other business processes with a single source of truth built for private capital. Request a demo today or see how firms like yours use Altvia.

In this blog, we’ll discuss how to formulate an effective strategy for efficiently managing and accessing your private equity data.

Data is only as valuable as it is accessible and understandable. Without an effective way to manage information, it can very quickly become “noise.” And in some ways, that’s worse than not having the data at all, since it can hide valuable insights that you might otherwise have discovered.

To get the most out of your private equity data, take these four steps:

Step 1: Focus on Private Equity data problems you need to solve.

Start by looking at your organization’s business goals in order to identify what’s working and what needs improvement. And try to view things as an outsider would. It’s common—and probably the default mindset—to see the way things are as the way they should be, even if that’s not the case.

To clearly identify any gaps that should be addressed by a more effective private equity data management strategy, ask yourself:

• Which part(s) of our operations would be best served by more effective data capabilities?
• Who are the stakeholders who stand to benefit from a data strategy? How do they benefit? Why is the strategy beneficial?
• Where are there problems in our ability to generate and capture all the data we need?
• Which processes could be streamlined or better informed by data?
• What data would we like to have but currently don’t?
• Where could technology be used to facilitate internal processes that may be generating data that isn’t currently captured?
• Where and how do we currently store data?
• How usable is our data in its current format?
• Who do we depend upon to make our data usable?

Step 2: Understand your workflows.

Once you have a better feel for what you are trying to accomplish, consider where potential problems may occur and how best to address them. Where do your processes break down?

Here again, if your inclination is to say, “I think we’re good,” your perspective may not be entirely bias-free. It’s very rare to find an organization whose processes simply can’t be improved. There are always ways to streamline workflows, and in some cases, a major overhaul may be called for.

Looking at your current workflow, evaluate how you:

1. Access and/or connect to data
2. Prepare data to be properly analyzed
3. Perform analyses on and/or consume data

It’s important that you not take any shortcuts here. You’ve got to be sure you can trace the path that data follows from the moment it’s received or generated to the point where it’s been used as appropriate and is now stored for potential future uses. This has to include every stop or operation along the way.

Step 3: Dip your toe into Private Equity Data analytics.

Chances are, your current process is cumbersome and relies on manual input into disconnected systems. Raise your hand if your analysts are relying heavily on Excel spreadsheets? And raise it again if you consistently see #REF!

Today’s analytics solutions make it possible for business users with no technical skills to perform complex private equity data analyses in real-time and very intuitively. This saves you and your organization valuable time and resources.

With tools that allow you to access, prepare, and consume data more easily, analysts can make more efficient use of their time and talents—offering more strategic value to your firm and helping you differentiate from the competition.

Step 4: Get ready to demo private equity technology.

Now that you have a better idea of the benefits that more effectively managed data can provide your organization and what you are looking for in a solution, it’s time to explore what’s available in the marketplace.

There are solutions that bring together data from disparate sources in one place, then model the combined information to establish a “single source of truth” for all of the data across all of the systems. Even better, the right solution can connect to the data systems already in place, with no need to export or upload information, simplifying the process. In that way, everyone on your team has access to the same relevant, up-to-date information, anytime and from anywhere.

Solutions that allow you to connect and use multiple databases provide the best of both worlds: flexibility and customization. Effective use of data, coupled with a technology solution that is specialized for private equity firms, can help organizations significantly improve their use of time and resources, increasing efficiency and simplifying processes.

Altvia has developed a data and technology platform specifically for the needs of private equity firms:

The base of a modern technology platform is built on a single source of truth that supports key workflows, contact management, relationship mapping, and the automation of key activities (ie. emails and task assignments)

The intelligence layer connects, normalizes, and displays data across sources (ie CRM, Accounting, 3rd Party) to drive speed to insight.

Distribute personalized content like PPMs, K1s, and Capital calls with ease and enhance the investor experience with a secure portal underpinned by data-rich analytics.

Today, firms use interesting technologies to improve and quantify their processes but when compared to the vastly more impressive capabilities of modern data science techniques, Excel and Outlook just aren’t cutting it in the lifecycle of a private equity fund.

By far the largest latency PE firms face today, is the lack of connectivity across their operations. For example, most firms will have a detailed Excel file with a list of all the prospective LP contacts their ex-investment banking analysts and associates connected with back on Wall Street. 

Some of the more technologically driven firms might even send this file to an outsourced marketing company that sends generic emails to these potential investors in the hope they set a meeting with one of the General Partners. While time-tested, this way of dealing with investors is rudimentary at best when we look at all the possibilities of raising capital with a modern tech stack. 

Fundraising isn’t the only stage of a firm’s life cycle where robust data analytics can drive improved results. Efficiently collecting, storing, analyzing, and presenting data will vastly improve a firm’s performance at every stage of the process. 

Communicating to Potential Investors

Fundraising is the first and often one of the most tedious processes for a firm. During this process firms are hounded with problems, many of which determine whether or not the firm will survive; dealing with constant rejection from potential LPs, updating pitch decks right before a meeting with an investor, modifying the presentation of the firm’s thesis for each investor are just some of the many examples of something that can go wrong in the traditional approach to fundraising. 

Proper data analytics uproot many of these issues from the source. For example, Altvia allows you to create ideal investor profiles which can be matched to investors searching for firms increasing the chance of each LP meeting ending with a metaphorical ‘cheque’ so to speak.

One of the often-overlooked aspects of fundraising is the direct investor communications such as capital calls, firm updates, and even just meetings with the general partners all of which can be automated using the Altvia platform.

Private Equity Fund Pipeline Management

The next stage is to deploy capital. This stage is the one that the vast majority of people attribute to working in finance. In reality, deployment really only takes up 20 to 30% of the average analyst’s or associate’s job description.

Deployment is often characterized mainly by sourcing New Deals that fit the investment thesis. This can also mean thinking of new industry niches and creating industry reports to seek out new avenues for investment. 

The implementation of software here, however, is there exists a massive amount of data spread out over multiple sources that can be quantitatively analyzed to immediately source, contact, and analyze prospective Investments.

Altvia consolidates these data sources to create a dashboard of the most current Private Financial information for GP’s to use. Improve deal flow by ranking and sorting deals depending on attributes, attractiveness, and stage in the deal process. 

Portfolio Performance & Analysis

Managing already made investments constitutes the vast majority of what a PE firm does. Analyzing/adjusting investment company operations, identifying new strategic acquisition targets, and generally improving the profitability of Investments is the real meat of the job.

The unique perspective that PE holds over investment management is that these firms have an inside look at both the company and the industry. Altvia optimizes this perspective to minimize inefficiencies in investment companies by comparing them to comparables in their space at every level of the company. 

Another advantage software gives PE firms is the quantitative method by which they’re able to analyze a company’s operations. Today, most investment companies have multiple sources of revenue, an ever-changing list of costs, and a medley of very different operational tasks. 

Connecting these disparate data sources always allows you to perform machine learning and other modern data analytics techniques to dynamically predict which operation desertions will end up helping or hurting the investment company. 

Instead of outsourcing operational management or having investment companies evaluate themselves, an upgraded tech stack can help PE firms get more in-depth and personal control over their Investments. 

Private Equity Fund Performance & Analysis

Once the majority of operational decisions have been taken and value has been added, it is time to analyze the fund’s performance. Most notably, this entails creating accounting reports, tax statements, in-depth capital structure statements, and other general reports necessary for the fund’s exit in the investment. 

Consolidating this data into these accounting reports is a time-heavy task and an expensive one at that. Hiring an accounting firm to keep a track of a firm’s cash flow is a heavy recurring cost. Altvia’s centralized data collection, storage, and analysis are able to support data collection and support the collection process.

LP Engagement

Finally, the last stage of a firm’s life ties back to our first one, Investor Feedback.

IR is the real backbone of a firm and so having efficient, centralized software to manage it is ever more crucial. Announcing post-exit earnings to investors is a very exciting period for a firm and it should be treated as such. 

Furthermore, transparency with investors after an important exit is also crucial and so an investor dashboard is an essential part of any tech stack. 

An investor dashboard provides a way to self-serve metrics to track data visualization. Limiting LP requests for your IR team.

Combined with the aforementioned announcement and automation, Altvia’s software allows firms to focus on what matters most, financial analysis and value creation.