Harnessing technology to place capital more effectively

Competition for deals is fierce, and value creation can be tough given the broader macro environment. Private capital firms are increasingly looking for an advantage and often struggle to get the information and insights they need to make the best decisions. As new investors begin investing more in private capital, they will require transparency and detailed portfolio information to satisfy their reporting and compliance needs. Quick and user-friendly access to quality, clean data is an imperative not only for your investment team but also your investors as you look to place more capital effectively.

Anyone can fill out a spreadsheet, and that is what most are doing when collecting information from their portfolio companies. It is what you do with that information that matters, and that’s where many of the challenges exist. How you harmonize that data across your portfolio companies, industries and stages of investments; how you integrate the portfolio KPIs with your portfolio and fund accounting data; and how you use that information to make critical decisions about follow-on tranches and additional investments can raise issues. A data model that assimilates the data across the portfolio can provide controls for quality and consistency and drive confidence in reporting on the backside.

At this stage, many firms have not started automating the data collection experience for their portfolios. Putting the right processes in place involves people, time and technology; smaller funds, in particular, would benefit from the scale that a partner can offer to automate and streamline that process.

The good news is that some technology providers offer a data collection and management service along with the analytic tools and dashboards for a full portfolio management solutionThis gives smaller firms the opportunity to get the tools and services they need to position themselves for future growth, and larger firms the opportunity to scale and streamline their operation for cost savings and improved data quality. It’s not just about the user experience you provide for your investment teams, it’s about how you can meet your investors’ transparency needs. The added benefit is the flow through of this portfolio data to your investors to service and align with their evolving transparency needs.

A technology partner that offers a frictionless flow of data can help you make faster and better decisions about where and when to place capital and provide investors with the information they need. Armed with accurate and timely data, you will be ready to compete effectively, secure the best deals, and keep your investors happy and ready to re-up in your next fund.

In conclusion, the right technology can help you make better investment decisions, place capital more effectively, and give investors the level of transparency they are seeking.