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What are the challenges of placing capital today?
PLACING CAPITAL WITH SMARTER TECHNOLOGY
2
contents
Why now?
9
The practical implications
8
Achieving frictionless flows
7
Focus on data
6
The barriers to placing capital
5
Setting the scene
4
Introduction
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You’re on the cusp of rapid growth. A new generation of global investor is gaining access to the private capital market. Asset allocations are rising, especially with focus on environmental, social and governance (ESG), driving demand for even greater transparency and accuracy. But as you look to place capital in a more virtual world, you’re confronting a painful truth. You have to accelerate your digital strategy to improve data access, integrity and security. And you need to do it now.
PLACING CAPITAL IN CHANGING TIMES
Are you ready?
Invest in digital to:
For the last year or so, the focus has been on managing the existing portfolio and assessing the risk of geopolitical and economic factors. Fundraising is still performing, so there are continuous inflows of capital in search of alpha. The investor profile is changing as well. As more people see private capital as a growth opportunity, we’re seeing increased competition to service them. You need to up your game to stay ahead of the pack.
Improve access, integrity and security
Make faster decisions about where to place your capital
You have to act fast to capture the influx of money, but there are several challenges standing in your way.
Fair price
The valuations of some of these companies have risen dramatically, making some acquisition opportunities less favorable or unviable. Do you have historical or current comps to reference? Are you in the space you want to be in? You’re always having to assess and re-assess your playbook. Do you have to seek co-investors? Do you consider offering access to select limited partners? You need to act fast and you need accurate and timely data to make these assessments.
Fair Price
The rise of sustainable investing
Investors are only interested in certain types of fund managers and fund deals. Your old approach to portfolio company data collection won’t work anymore. And you need to be able to prove that you’re not just greenwashing your funds or your own activities as a company.
The Rise of Sustainable Investing
The need for speed
Data integrity
Everyone's fighting for the same deals, so you have to strike fast. You may only have days to act. To make good investments, you need to act early on a fair price and then execute quickly.
The Need for Speed
You need accurate and timely data to properly plan your capital call timing and pacing, and the number of distributions versus recallable. Cashflow pacing and cash availability are essential because investors want predictability.
Data Integrity
Clients are trying to remove all of the friction from investing. One of their biggest goals is to get information back to their investors and stakeholders in a seamless, transparent and more timely way.
You don’t want to make investment decisions based on stale and inaccurate data. You need clean and current data that has an audit trail. The same goes for your investors. Infrequent updates on total capital in return won’t satisfy them anymore. They’re looking for transparency at the fund level on fees and carried interest, and a look-through to the portfolio company. They also want that data at a more granular level, such as EBITDA, and even its components along with CAPEX and OPEX time series. To continue to attract investors, you need to report on not just your own strategy but also scores of data from the underlying portfolio companies too. And they want all of that in a user friendly format similar to what retail investors see.
Dan Kaytes, vice president, Product Management, Digital Solutions, Private Markets, FIS
Beyond access to data, how do you make processes easier and more seamless? How do you make sure that you are getting information back to your investors or internal stakeholders – and that you do it in a more transparent and timely way? You need to remove those obstacles. That helps you respond to the democratization of private equity and the influx of retail investors. In addition, as millennials become the next generation of investors, the expectations of the investor experience are changing to be tech-centric and digitally native. Digital data and portals also allow you to give your deal professionals the latest information on their devices – whether they’re in the office or on the road. And you can make that data searchable too.
Paul Landi, product strategy, Digital Investment Analytics, Private Markets, FIS
Digital technology lets you take all of your data, structured and unstructured, and really see through it. And then you can leverage the tools to gain insights and drive the outcomes that you're working towards.
You may be managing funds on legacy systems that are inefficient. Onboarding a new fund onto a new system that offers advanced technology and functionality can bring efficiencies and improve the user experience. It’s important to make the right choice at the right time. Once you make the decision to change, you have to choose wisely. You want something that works. You want a partner you can trust to collaborate with you and be there long-term. A provider with real size and scalability that delivers continuous investment in their solutions.
Why act now?
Your system is breaking under the strain
Your investors are unhappy with the data transparency
You want to work with a stable fintech provider that’s continually investing in private equity technology
You want to access the latest technology and unique functionality
Contact the team
Let's solve placing capital
To keep pace and to keep investors, you need a technology partner that offers speed and unrivalled technology and services to guide you on your move to digital. FIS® is enabling a frictionless flow of data between the front, middle and back office by accelerating how we develop and advance our integration capabilities. FIS® Private Capital Suite (formerly Investran) gives you an accurate, enriched and aggregated view of fund and portfolio KPIs, so you can make better, faster decisions about where to place capital.
which way now?
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FIS is a leading provider of technology solutions for merchants, banks and capital markets firms globally. Our more than 55,000 people are dedicated to advancing the way the world pays, banks and invests by applying our scale, deep expertise and data-driven insights. We help our clients use technology in innovative ways to solve business-critical challenges and deliver superior experiences for their customers. Headquartered in Jacksonville, Florida, FIS is a Fortune 500® company and is a member of Standard & Poor’s 500® Index.
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