• Corporate Development
  • Financial Services
  • Private capital
  • Intapp DealCloud

Private equity opportunities to emerge from COVID-19

This article was originally published by the Minneapolis/St.Paul Business Journal. To read the original, click here.

As I’ve talked with private equity and corporate development professionals over the last several weeks, I’ve heard the same theme again and again: “we are focused on identifying opportunities so we can come out of this crisis stronger than ever.”

Despite the pain unfolding across the economy and the near-term difficulties in executing on transactions and strategic growth plans, professionals in the private sector have collectively realized that this crisis will create opportunities as companies are forced to search for new capital, restructure, or seek exit opportunities.

At the same time, I’ve also heard private equity firms and corporate development teams overwhelmingly say that technology has allowed their operations to continue with minimal interruption while teams work from home. While it’s rather remarkable how huge portions of the economy successfully shifted to remote operations virtually overnight, I also worry about the long-lasting effects this crisis and the disruptions it has caused will have on the broader market.

Clearly some will come out of this crisis stronger than others, but as competition for deals has increased in recent years one thing has become clear: firms and companies that have a technological infrastructure in place that allows for comprehensive deal and relationship data to be easily accessed and shared have a significant advantage. Those who are operating without technology that facilitates institutional knowledge share are suffering from communication breakdowns and a lack of productivity that will leave them more disadvantaged than ever.

While the concept of creating a collaborative and centralized knowledge base has certainly been top-of-mind for many businesses as they navigate the Covid-19 crisis, it’s frankly always been a major pain point. Most private equity firms and corporate development teams accrue an amazing amount of insight into add-on, roll-up, and strategic growth opportunities but don’t have a way to share that knowledge across their organization. In the end, they waste time and lose out on deals because the information gets buried under other priorities.

Since founding DealCloud, a software platform that enables deal and relationship management activities to be centralized in one place, we’ve helped countless investors and corporate executives recognize the benefits of leveraging institutional knowledge. Regardless of the industry, successful add-on and roll-up deals require teams to share business intelligence, relationship intelligence and sector analysis.

To facilitate that sharing of knowledge, we purpose-built DealCloud as a single source of truth for all information regarding deals, intermediaries, and other deal sources that enables private equity firms and corporate development teams to operate more efficiently and strategically. Now more than ever, connecting and collaborating can be the difference between sink or swim.

It may not sound earth shattering, but housing all of a firm’s institutional knowledge in a single platform opens the door to new proprietary insights that can give an edge over competitors. By combining that data in a single place, deal professionals and corporate executives are able to create dashboards that enable monitoring of each sector in which a roll-up strategy could be successful, as well as all of the companies that could be included as acquisition targets.

The bottom line is that when data is not tracked or when it is not centralized and easily accessible, deal professionals miss opportunities they otherwise would have recognized.

As private equity firms and corporate development teams survey the post-crisis landscape, the insights generated by deal teams will likely be the difference between winning and losing out in a highly competitive environment. Therefore, coming out of this crisis stronger is not about how well deal professionals and executives transitioned to work-from-home – it is about how well they leverage institutional knowledge in every aspect of their growth strategy, both during the crisis and after.