Tag Archives | LP

Three Reasons Why LPs Are Finally Playing Catch-Up to Tech-Savvy Asset Managers

Cloud Computing Gives LPs Faster Technology for Better Portfolio Monitoring

 

 

 

 

 

 

 

 

It didn’t make headlines, but the news is a major development in the alternatives sector nonetheless. A large majority (83 percent) of limited partners (LPs) have either recently upgraded, or are planning to upgrade, their back office monitoring technology, according to a recent Coller Capital survey of LPs.

That type of stark departure from the status quo warrants some explanation.

For different reasons, LPs have been slower than GPs to embrace new technology. Public pensions are hesitant to spend tax payer dollars on new systems while smaller investors such as family offices and endowments tend to have less room in the budget for tech upgrades, even if it means savings in the long-run. As capital providers, LPs are also under less pressure than GPs to reap efficiency gains and savings from new technology in order to remain competitive.

So what’s changed? Three key trends explain the situation:

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Webinar – How Cloud Computing & Salesforce.com are Setting New Rules for Private Equity

Do not miss this recently recorded and well attended webinar, “The New Rules for Private Equity Firms” with Martin Stein, one of my favorite speakers.

With a more competitive private equity environment, it’s often challenging for smaller firms to match the resources and reach of larger firms. Whether it’s getting the right deal flow, building better LP relationships or managing portfolio companies, smaller firms have had to work much harder.

However, this is changing – cloud computing and social media are leveling the playing field. In this webinar, Martin Stein of Blackford Capital, a private equity pioneer, outlines how smaller private equity firms are becoming equally important players in the private marketplace.

In this live session with Ketan Khandkar, Martin explores the answers to these important questions:

- What smaller firms need to do to differentiate themselves in today’s markets?
- How cloud and social media will transform intermediary/LP relationships and deal flow?
- How cloud computing is providing competitive advantage as well as eliminating IT costs?

View the webinar here. Also, feel free to post your comments and ideas.

Alok Misra

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How Social Networking May Impact Private Equity Deal Sourcing?

Nicholas Donato explores how technology and social networking are influencing the way private equity funds operate, in his well-written article for the PEI Fund Administration & Technology Compendium, titled:

The fund of tomorrow … today

One of the questions that the article raises is whether social networking can change the way deals are sourced, in a people business like private equity? Here is an excerpt from the article:

….. Navatar is also rolling out a free cloud service to connect GPs with M&A bankers and other industry contacts to form an online community where deals can be collaborated. Navatar’s social networking site for private equity professionals works by having buyout shops create an online profile describing the types of deals they target alongside their contact information. Bankers, business owners and other sources of deal flow can then access profiles that match their capital seeking enterprises.

The free cloud service, that Nicholas refers to, is Navatar Deal Connect, scheduled for a beta launch in late August. The article goes on to say:

At the moment GPs don’t rely on portals for originating transactions, sources say. Private equity is after all a people business, points out Philipe Bucher, chief financial officer of Adveq. But similar to the evolution of social networking sites, who’s to say one portal won’t feed off its own success to morph into a dominant internet presence, a feat Facebook accomplished after eclipsing rival sites such as hi5 and MySpace. One can imagine a GP in the future sourcing deals from the comfort of an armchair, jokes Bucher when asked whether portals have the potential to be a significant source of deal flow down the line.

Will GPs ever get comfortable with the idea of sourcing deals from an armchair? I’ve never been a GP in a private equity firm, so I’m not sure I have the credentials to answer that (although that doesn’t stop me from babbling about how deal sourcing is about to change). I can tell you, though, that during the early days of Linkedin, most of us who were sourcing consulting business for Deloitte (that’s what I did back then) scoffed at the idea of getting a Linkedin account – of course, most of my management consulting buddies (Deloitte partners) have had a (dramatic) change of heart on this issue.

OK, I’m biased, but what would it take for a social networking portal to bring about this change, in your opinion?

Alok Misra

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