Jeff Williams Featured in PitchBook Q2 Fund Strategies Report Q&A

Based on your clients’ recent activities across your tools, what is your take on the current fundraising market for private fund managers? Does their usage signify any evolution in utilization or approach that indicates the emergence of any broader trends? 

There’s no question that the market is hot, and—let’s be honest—it’s exciting to watch. Some interesting themes can also be inferred from the utilization of technology. I’ll characterize them as implicit or explicit trends or themes. In many cases, our platform’s users—GPs, LPs, and intermediaries—ask for features and/or advice without explicitly mentioning what they’re struggling with or providing much context. I enjoy these instances because I’m curious about which problem, or series of problems, the proposed solution attempts to solve. The reality is that these implicit requests don’t yield dramatically new insights that are worth readers’ attention. For example, three things are clear from these types of requests: Managers are attempting to raise as much capital as they possibly can as often as they can, the traditional fundraising cycles are becoming all but extinct, and managers are diversifying—much in the style of assets managers—to co-raise funds at the same time and with a related story. This is not breaking news, but I can confirm these trends are some of the more implicit requests from the market. 

From more explicit conversations, we can deduce something I find far more interesting. The overwhelming majority of these come back to three key trends: Managers have a heightened awareness of their story’s strengths and potential weaknesses, there’s a new breed of manager that isn’t paying much attention to the status quo and is using data and technology in incredibly differentiated ways, and all managers— including established ones looking to hone their stories— are looking toward technology as a solution to these challenges more than ever before. 

Interesting technological advances are happening everywhere you look these days. Having the perspective we do is exciting, especially because we’re now starting to see the future we expected and are well positioned to take advantage of.

How has the shift to remote work over the past 18 months, and the subsequent gradual return to hybrid and in-person work, affected your customer base and prompted changes to your strategy? 

Our initial reaction to the COVID-19 pandemic was no different from other businesses’ reactions. It was a scary, unprecedented time, and executives had no choice but to assume the worst. In hindsight, it’s much easier to see that we were sitting on a huge opportunity. For example, instead of scaling back technology purchases to cut costs, initially many of our customers dramatically increased spending to help new users benefit from collaboration features and the sharing of workflow and data that our technology provides within firms themselves. 

Not long after that, it became clear that this wasn’t just an internal systems problem; the way GPs sought out investment targets or provided customer service to LPs also had to change. The sudden inability to host annual meetings or sit down with target company management teams, combined with the increased anxiety felt by both parties, required new ways to engage with other crucial parts of the ecosystem. 

While we hadn’t imagined the catalyst being a pandemic, we were fortunate to have been positioned to take advantage of a future where our technology played an increased role in the market’s value chain. It was another case of our initial fears being based upon unknowns that would ultimately lead to huge opportunities. 

The reality is that as cliché as it sounds, the world has changed, and some things will simply never be the same. For me, that’s the spirit that is accelerating the broader trends observed in an earlier question: The market is no longer reacting. Now, managers are proactively and aggressively taking advantage of additional technologies to differentiate themselves. 

To me, the most obvious of these trends is establishing balance among the new world’s noise level. Remote or distributed work generates a lot of noise in the form of meetings, check-ins, etc. Technology both helps with collaboration and generates some noise that it can also solve. 

Although information is available when working remotely, there’s increased noise in what are effectively two opposites of the same spectrum: having to find something you don’t know you’re looking for, or drinking from a noisy firehose. We’re working to create user experiences that make clients aware of the information they most likely need and provide it when it’s likely relevant. We think the application of this at a basic level will contribute to another evolution of competitive dynamics, such as speed, in the market.

How have trends evolved across the different facets of fundraising, from marketing to administration? 

I mentioned it earlier, but it simply can’t be overemphasized. Fundraising and marketing are functions that were historically cyclical but are now always “on.” This is a simple evolution to acknowledge, but to keep up with the market, managers are now looking to technology that can help with this transition. As it turns out, administration can effectively frame this shift. Historically, firms saw fundraising, marketing, and administration as mostly siloed activities with some limited degree of overlap. I’d argue that the shift we’re seeing allows us to view these activities as concentric circles. If fundraising and marketing are always on, the process of interacting with LPs in an administration capacity is a key customer service function that supports marketing and fundraising. 

Relationship managers need to be able to react quickly to the informational needs of customers from the key part of the prospect base they’re currently marketing to—and vice versa. The increased level of technology present in the market today creates situations where, for relationship managers, not being able to quickly understand the health of the customer and/or prospect and acting as a result of that misunderstanding is simply not good enough. 

The result of this trend, from our perspective, is that firms are moving to break down silos between fundraising/ marketing and administration activities. The activities are coordinated with elegant precision, and typically— because of the historical silos—that means bringing technology systems that serve different functions together into a single, coordinated view. In most cases, these systems and activities are turned into tools built for relationship managers and marketers. 

Administration remains important, but it’s less strategic than the hub for marketing and fundraising and usually ends up supplying relationship management systems with the information they need to compete in today’s market. 

What are the key technical hurdles your clients struggle with the most that you target? 

Technology is constantly changing, and it’s happening today at a pace we probably can’t appreciate. One of the broader technology trends we observe, no matter the market served or organizations that make up that market, is the movement away from all-in-one technology solutions. Not long ago, the convenience of a single system offered compelling advantages over the difficulties of integrating key systems yourself. Those days are long gone. Many modern technology solutions come ready to interact with other systems, and in return offer better experiences for users in different functional areas. The all-in-one system often solved a key technical challenge but created the different problem of marginalizing users in at least one functional area. 

The most common technical hurdles we encounter are typically associated with this dynamic. In some cases, it’s the complications and paralysis that stem from the belief that all-in-one systems are still the only way to approach solving technology problems; in other cases, it’s challenges associated with unwinding and cleaning up technical messes created by this approach.

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