Jeff Williams Leads Panel at 9th Annual Private Equity US Spring Forum.
Jeff Williams, Senior Vice President, Industry Solutions & Strategy, Altvia
Misha Logvinov, Managing Director & Head of IT Strategy, EQT Partners
Dave DuVarney, Principal, Baker Tilly
Dan Kaytes, Vice President, Product Management, FIS
Altvia’s SVP, Industry Solutions & Strategy, Jeff Williams led a panel on Technology, Security, & Intelligence Influence in Private Equity at the 9th annual Private Equity US Spring Forum hosted by Markets Group.
The panel covered how alternative asset firms manage data and cybersecurity risks, and how firms utilize and leverage technology to improve firm, portfolio company, and limited partner relationship management and transparency.
As technology evolves so has the need to integrate new platforms. Firms that have both the internal experience to handle funds management and the technological capability to deliver effective services are likely to be the best positioned.
How are managers using technology to protect their investments and integrate front, middle and back-office operations?
Here’s what the panelist had to say.
What’s Happening Today in the Market?
The pandemic created the need to not only look at current data but look at future data. There has been a big acceleration of digital adoption. We have seen a 3-5 year acceleration over the course of a couple of months. Digitizing your workforce is crucial, and making sure it is as efficient as before, since being remote opened up a lot of risks.
Shift from GP to LP
A lot of firms’ investments pre-pandemic helped them adapt to the work from home environment. Systems need to be accessible from everywhere. When it comes to leveraging technology investments, some firms didn’t miss a beat. GP’s were able to respond to LP requests just as well as before.
Gathering data for these meetings is monstrous, and it almost helped going digital, so you are able to have more access to that data vs. being in person. Data is always going to be a challenge, but it is also a big opportunity. From a PE perspective, the manual effort is time-intensive, and it takes you backward vs forward. Getting a handle on your data will drive your ability to look forward. Some companies try to skip right to that, but it’s a journey and you have to make investments before you will achieve that level.
Data Investments in Private Equity
It is impossible to keep up with the increased number of companies being formed. Why don’t we utilize data for insights, qualify them, create a workflow around them, and make data-driven decisions? The abilities of digital are unmatched when it comes to manual work. It’s a long-term investment, but it comes with incredible results, and then you can scale it from there. Now we can get much broader data and information.
Using Data to Tell a Story
We want to marry that data with other providers (ie. Preqin). Firms have to pull data from other sources and bring it into their own strategy for internal stakeholders and LPs. It allows you to provide useful data to the investors and the internal stakeholders. Data models are extensible so clients can change or adapt them to their firm’s initiatives. The adoption of data-driven decisions is likely to progress in phases, it does not happen overnight.
Private Equity Security
There are secret weapons being developed, and it is important to make sure these are protected. It makes the stakes that much higher. The adoption of cloud infrastructure allows us to do things we couldn’t do before, but presents opportunities and challenges: you have to make sure the cloud is authenticating the individuals, segregating information, etc. There are advantages to working with the cloud provider, however, you still have to put a lot of effort into keeping the data safe.
Misha states the unfortunate irony of going digital, which opens the possibilities for your data to be breached. You have to double down on the security, but it will never be perfect. Firms have to be prepared and know how to respond to breaches because it is bound to happen no matter what. Cybersecurity ramps up at the same speed as tech adoption, because they go hand in hand. It will only get worse, so firms need to work around it, and create a strategic roadmap.
Where Does Private Equity Go From Here?
A lot has changed in a short amount of time, but we don’t have time to stop and take a breather. Technology is only ramping up. We are seeing an influx of capital, new investors, and millennials getting into the workforce. This challenges firms to innovate on every front. The API’s and connectivity are critical to servicing the needs and sophistication of the clients. The ability to structure data for analysis is becoming critical. Since the workforce is changing, people are expecting digital, and firms who don’t adapt will fall to the wayside. Most industries have gotten more productive over the past year, and we as a society need to make sure we keep a healthy balance. Our mental and physical well-being is just as important.