Digital Potential in Private Equity at Fund Level

Facing pressure from increased competition, fees and regulatory burdens, Private Equity firms are beginning to embrace digital transformation as a means of standing out from the competition.

From what was originally seen as a cost saving measure, cloud technology and cloud based services are now being used across the whole spectrum of private equity activities at both at firm and a portfolio level.

Be it streamlining business processes, creating value in portfolio companies or using data analytics to source new investment opportunities.

Fund Level

At a fund level movement to the cloud and new technologies were originally seen as just a cost saving on expensive on-premise equipment.

However, the industry is now recognising the processing power the cloud provides and how it can be used to enable advanced analytics platform for competitive advantage.

A recent survey from BDO highlights Just how PE companies are looking to leverage technology at a fund level.

Opportunities for Unlocking Digital Potential in Private Equity

As we can see, increasingly Private Equity companies are looking at cloud-based technologies as a means of utilising the data processing power to aid in data heavy tasks of portfolio monitoring and benchmarking. Cloud based technology’s ability to perform tasks quickly and cheaply is helping reduce pressure on management fees in very competitive market.

Growth in data analytics as a means of sourcing deal opportunities is also increasing. In a market where sourcing good quality target investments paves the way to success, technology is becoming a key way of gaining competitive advantage.

Transparency is also an important driver for this change. While there is increasing demand by investors for more regular comprehensive reporting, GPs are recognising that having an analyst pouring of in-depth spreadsheets is not efficient, when cloud-based SaaS systems are available that can deliver that information in real time and without error.

Its seems GPs and Investors alike are becoming more open to movement to public cloud for security reasons. Placing sensitive data in a highly secure environment that only companies such as Google, AWS and Microsoft can deliver.

If you have found this blog post useful you may like to read our related articles below, or take a look at the Alternative Investment page to find out more about the work TiG Data Intelligence does in this specialist sector.

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