Private Equity Firms Shift to Fund Managers Who Execute

As 2017 comes to a close, what were the key developments in private equity for fund managers and limited partners over the past year, and what new opportunities can 2018 offer? Continue reading for perspectives from Altvia’s Founder & CEO, Kevin Kelly, on marketplace trends from 2017 and what to watch and plan for in the next year.

What are some trends that you’ve observed in the private equity industry over the past year?

There are incredible opportunities emerging as private equity firms change their perspectives on data, accountability, and transparency, and these changes show no signs of slowing. Increasingly, private equity firms will be judged on their execution and operational excellence in addition to performance. The firms that welcome this trend will pull ahead of their peers and differentiate more successfully in the marketplace.

In our business, we work with leading fund managers and limited partners and we’re seeing cultural shifts within organizations, rather than just attempts to implement new tactics. Historically, many private equity firms have tried to differentiate themselves with “secret sauce”: an arbitrage of information that allowed some managers to outperform others. The effectiveness of that secret sauce is diminishing.

We’re also seeing a shift in awareness. Leaders of private equity firms are understanding that just throwing technology at operations and systems, then hoping that a one-size-fits-all solution can help them separate their firms from the pack, is not the answer. It’s about choosing the right components for your business, then implementing them in an orchestrated fashion with good leadership and change management.

Lastly, with an increased understanding of the power of great systems and processes–and the ability to truly leverage data–information security is now front and center. It’s not enough for a firm to give lip service to information security. Smart firms and leaders know that they must demonstrate sound information security practices and be able to embrace continually evolving policies and procedures.

What are some of Altvia’s company highlights from 2017?

As a long-time partner, the Lightning experience is a huge step forward. This enables us to bring more innovation to our products and solutions.

Our newest product, Altvia Answers, directly addresses the pains and needs of private equity managers and investors. Access control (rules that define who can see certain information and what can be done with that information) is a core function of Altvia Answers and extends to users inside of an organization as well as outside the organization when combined with our limited partner portal, ShareSecure. These solutions can help provide an organized and structured way to control who is consuming data, broadening a firm’s efforts related to information security and transparency.

Another highlight for us is the incredible expansion we have made to our teams in support of a vision we’ve had for several years: scalability. In order to continue providing exceptional service to our clients, we need to constantly optimize our operations. And the same thing is true for our product development; bringing increased rigor to how we conceive and develop products helps us truly solve market problems. As our client base and organization have both grown in size, we’re also bringing a higher level of specialization to ensure that our clients are poised to face increasing demands. As we look forward, we will continue to attract the brightest talent and be proactive in anticipating the specialized requirements that our clients will need. As I look back at 2017 and the great results that have already started coming out of this, I am confident that this is going to yield incredible dividends. We have gotten better and stronger, and the resources and capabilities we have heading into 2018 are unlike anything that we’ve ever had before. We are poised to do some amazing things in the next year.

Looking ahead: what are some factors that Private Equity firms can consider for greater differentiation?

The best piece of advice I can give to fund managers and limited partners is that it’s not possible to just throw technology at a problem and expect change to happen. The most successful organizations will consider change management and effective leadership in order to make significant strides forward. Also, firms need to acknowledge that while it may take longer to begin performing tasks in a more systematic manner, the initial, upfront investment of working in a smarter way is going to pay dividends forever. This will also help organizations better leverage their human capital; stepping back and getting out of some of the mundane, manual operations that firms may still be using enables teams to work toward more fulfilling–and profitable–tasks such as raising capital, courting the right prospects, and sourcing better deals.

Stepping back and thinking more strategically, as opposed to grinding away, is the mindset shift that has to happen. Since this is a bit of a paradigm shift, it’s important for organizations to start with the right balance. Having an awareness of what technology or solutions can do will help to inform what might be possible, and raising awareness about those possibilities is what opens up an organization’s true potential. It’s all about bigger shifts that may take a little longer, as opposed to doing what’s quick and convenient right now, so that firms truly get the full value of the improved systems that are available.

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