Private Equity Technology: Getting the Most Out of Your Solutions

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, click here.

A traditional crm was built for general ‘customer’ scenarios

Software platforms have made the world a better place by making work a better place. Indeed the world is better off when people enjoy their jobs even marginally more, and workplace applications on big CRM platforms like have done that and much more.

But the potential that platforms like these offer presents diminishing returns: once the platform provider has engineered too many industry specific components into its platform, its usefulness for other industries begins to be threatened, and with that so do the usefulness of the component tools built into the platform.

So it is with the CRM category that has defined: it is generic enough to work for many industries, and yet still offers the potential for others to round off the edges and nail more vertically-oriented and extremely tailored software solutions.

Private capital markets are actually a great demonstration of this dynamic. Where generic CRM platforms simplify — appropriately so — to assume there’s a business, a customer, a sale, and service of that customer, there are a few industry-specific pieces that are missing.

Take for example, that investors become customers by investing through legal entities the GP raises. It’s a subtle but important nuance that just doesn’t make sense at a platform-as-a-service level (because it’s overly complicated for a simple one-time sale that many industries require), but which can easily be added without 10 years or software engineering. Once provided, the rest of the platform’s components become tremendously powerful again and you’re set to take over the world.

As a traditional CRM in our pillars methodology, these nuances must be present to properly account for investors in these legal entities, potential target companies and which are owned by these entities, the context of all interactions with these parties (as well as the appropriate overlap, ie co-investments), and how you’re arriving at finding these opportunities on both sides of the equation, such that you’re able to piece together what’s effective and what’s not. Not just because we say so, but because these are the very relationships and data that are key to the motivation behind a CRM in any industry.

It’s critical, too, that the valuable publicly-available information that helps to enrich CRM systems and save users painful steps of entering it themselves is fully-integrated at the platform level.

Again, look no further than the 3,000+ pre-built integrations that — the creator of the CRM platform concept — has at a platform level to do so, and which only exists by way of holding just short of overly-specifying certain industry workflows that would present challenges to properly integrate.

Stakeholder reporting and communication (investor relations) draws on a range of datasets

The traditional “customer service” model of CRM systems once again makes overly-simplified assumptions about the customer relationship when applied to private capital markets.

In fifteen years I personally have yet to hear the terms “warranty” or “service call” in this market because it’s just not the same. But make no mistake, as uncomfortable as it may be to say aloud, customer service is more important now than ever and it’s constantly happening; the industry is, after all, considered to be a financial “service”.

As it turns out, that service is primarily information-based — it’s driven by data and takes the form of reports and analysis that drive decisions, and then end up again in investor-facing reports and analysis.

The foundational elements of a private capital markets CRM must be built such that they accommodate this data (like we discussed above), but so too that it can accommodate additional supporting data that investors (customers!) need in the context of service.

Oftentimes this supporting data — financial metrics and time-based values, for example — is believed not to meet the traditional definition of CRM and the natural thought is “well, better do this in Excel!”.

While I happen to believe Excel is still the greatest software application ever built, its introduction to this value chain we’ve discussed herein actually creates the problem many firms suffer from: key data needed to provide customer service (again: effectively the entirety of a firm’s reports and analysis) is now in disparate systems and detached.

Both of those dynamics are important and distinct: not only is this supplemental data disparate, but when brought together there is no logical association that can be made between the two data sets.

Allow me, then, to make the point very simply: not only can this financial and time-based value data (you may be thinking about is as “portfolio monitoring” or “accounting”) be a part of a CRM, it is arguably the most important part of a CRM because it’s at the core of what providing service to the customer entails — information that comes out of data!

Firms need a digital method to engage stakeholders (ie investor portals)

Investor portals are not new; in fact, for many of us — including myself — they conjure up horrifying nightmares in which we’re aimlessly guessing at folders to find the newest document we need.

So in lies the opportunity: not only have the portals we’ve come to hate not simplified the process of acquiring information, they’ve failed to create an entirely new experience that is “customer service” driven.

To be fair, this is not a B2C market where you’d be long out of business for not having focused on customer service and thus the customer’s technology-driven experience. But don’t expect to be around too much longer if you aren’t thinking about this shift.

Today’s institutional investors increasingly expect this same consumer-like experience, and a massive opportunity is being missed by not providing it. It’s not about providing them the experience they desire; it’s more about the ability to measure engagement that is had in return.

Put simply: what’s keeping the market from providing this experience is the availability of the information that’s required to create the service that provides the experience.

If you’ve hung in this long, you know that by focusing on your CRM, you have the data that’s required to manage the customer relationship and the technology-driven experience through which that information is shared to create a differentiated and opportunistic customer experience.