Private Equity Technology: Getting the Most Out of Your Solutions

Successful Private Equity firms 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, technology’s solutions can help firms to thrive and grow.

Most firms have already adopted technology solutions to a degree, however, non-integrated or disparate solutions can lead to issues of their own. Swivel chairs between different systems can cause significant strain in resource and time allocation.

Increasing regulations demand greater transparency. Migrating data and information to CRM systems and online storage requires constantly evolving security. How can firms overcome these challenges to get ahead of the competition?

By using the right technology.

Private Equity Technology

Innovators solve problems, whether they’re developing solutions in Private Equity, technology, or any other field. Rather than simply fixing symptoms, skillful innovators search for root causes in order to improve systems from the ground up.

Exploring underlying issues oftentimes reveals that key segments of a successful 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 resources, and an inability to scale, revealing the high cost of supporting inefficient systems.

When a firm is experiencing even one of these symptoms, it can have a far-reaching impact both internally and externally. However, a well-integrated technology and software system has the potential to solve these issues. A secure and effectively designed core CRM purpose-built for the Private Equity industry combined with integrated correspondence and LP portal solutions can dramatically increase a firm’s ability to quickly and efficiently demonstrate transparency, increase the security of their online documents and storage, save resources by providing users with user-friendly navigation, easily scale for growth, and ultimately reduce long-term costs.

Not to mention that state-of-the-art solutions can help a business position itself as an industry leader and strengthen its reputation.


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 a need for change, and firms will research possible solutions in order to find the right provider for them. When looking for a solution, best practice indicates that prioritizing what is most important to a company and its specific business is the preferred option.

To get started, first look at your current systems and how they are working for your team internally, and how they are working for your external partners and investors.

Is your team spending too much time moving between systems? Do you need greater visibility or transparency for your investors? Decide what is a high priority for your firm, then search for new solutions.

A complete overhaul is also not always necessary; simply integrating a communications tool, investor portal, or finding a company that provides consulting and professional services could have a tremendous impact on your business.

There are many Private Equity technology solutions available, and the right solution for your firm is out there waiting. For more information about how our solutions could help your Private Equity 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.