Technology and the contemporary private equity firm

  • Financial Services

The most successful dealmakers are systematic in their approach to both inbound and outbound business development, but given the recent changes in the market, taking a systematic approach is much easier said than done. According to Bain & Company’s 2019 Global Private equity Report, “chronically heavy competition has driven deal multiples to historic highs, and growing jitters about an eventual economic downturn are affecting decision making, from diligence to exit planning.”
Fragmentation of the market continues to be the driving force for business development and relationship building, and buyers need to leverage private equity technology to ensure they are spending their time wisely. In fact, at many firms, “sufficient” dealflow coverage is defined as whether they were notified when a deal went to market, or if they were left out of consideration entirely. The most successful firms are those who embrace the increasing trend of a more calculated, technology-enabled approach to running their internal operations and to investing. These firms invest time, money, and resources into the technology that supports these efforts. As a result, these teams learn to work smarter, not harder.
After spending countless hours learning and comparing the various approaches to technology-enabled dealmaking at various firms, we extracted five major challenges facing dealmakers in their pursuit of a productive, high-functioning private equity firm. In this white paper, we provide actionable ways to combat these challenges.