Tech & Evolving World of Alternative Asset Management!

PE Performance on Excel- Rocks You Like a Hurricane! For a Private Equity Fund like any other business Performance Measurement remains the key focal point apart from other important aspects of business like raising the fund, valuations, deal making, compliances etc. It is important for both, the GP’s who would like to choose upon the metric which can project the fund as top quartile and for the LP’s who would like to dig with other metrics to reach to the actual evaluation of their investments and returns, for their investment decisions! The fund performance evaluations hold an equal interest with investment advisers who would be interested in knowing more than just the performance of a particular project but would be interested in comparing these investments with other funds which bring in the complexity as there are challenges like comparing an apple to apple to reach a logical conclusion. The challenges arise due to the size of the different projects being compared, geo...

Valuations - 😟 Had Always Been Worrisome!  O ne of the biggest challenges in Asset Management is to arrive at the fair market price of the portfolio and the assets that are being invested in. This challenge multiplies as the portfolio becomes more illiquid with few reliable sources of valuation data. Some of the biggest fund failures over the last few years like the Third Avenue Asset Management collapse have been attributed to badly mispriced securities.  In the aftermath of 2008 financial crisis Valuations of securities at Funds has been in focus with investors and regulators. Investor due diligence increasingly focuses on valuation policies, processes and models. Regulators across the globe have focussed on Valuation processes and increased their oversight of how assets are being valued. A big learning from the 2008 financial crisis was how lax some of the valuation processes had been with even the larger banks which created knock-on effects up and down...

Deal Management 2.0 In the previous post we had mentioned the challenges that Asset Managers Face as they reach out for the most lucrative deals in the market. The best asset managers are using deep learning technology as a differentiator for tracking, analyzing, and researching deals that they have in their pipelines. Pepper is intimately working with some of the leading deal makers to help them make better deal decisions. In this blog we provide a sampling of the some of the deal solutions that we are helping build for these managers.  Dashboards that provide an overview of the Deal pipeline, providing a clear summary of all the deals, the various stages, the total size, expected close dates, strategies, partners being the critical parameters. This provides senior managers with a quick view of the current status of the pipeline and focuses their energies on the most critical tasks of managing this existing portfolio. From these dashboards the manager can do a deep di...

Deals Getting Complex! The CEO of Blackrock - one of the world’s money manager, Larry Fink had once said  “Using technology is critical, It’s critical for us as investors, as we’re spending more time analyzing new sources of data, spending more time creating algorithms on the new sources of data. And we’re using technology to be more connected with our clients to help with financial literacy, to help all our clients navigate all our clients’ money.” The best Fund Managers including those at Goldman Sachs, JP Morgan or Blackrock are making outsized bets on technology to manage the business of investment. As Fink goes on to say “Technology will change the entire eco-system.” Technology has traditionally been deployed to reduce Operational Costs and get better access to data. But increasingly it is being used to manage the entire process of Investment Management. Fund Managers are increasingly developing sophisticated tools and techniques to manage the front end of th...

Data is the New Oil “Data is the New Oil” . Oil Powered Industrial revolution, transformed our lives adding a new dimension to the way we live in today’s world  Data is poised to power Information revolution and we are witnessing another transformation adding again a new dimension to humanity, redefining the way we are making decisions and the way we would make decisions in the times to come. Sounds good and fancy too! But how does it really relate to me as an alternative asset manager? The question is very pertinent and calls for a deliberation. Today data is produced at a feverish pace at an exponential rate of 4400% of what was being produced a decade back. This rate of rate of producing data too is growing exponentially and we would witness unimaginable amounts of data that is going to be produced. What we process today? Less than 3% of the total produced data!! This is huge gap and points to a big opportunity, just imagine if we could optimize the data capture and ...

Alternative Asset Management and Technology It’s astonishing that the $30 trillion asset management industry still relies on 76% of its tasks on spreadsheets. Asset management, and technology, are natural partners, where the industry generates tremendous amounts of data, and technology of-course hopes to manage that data. With the growing demands of getting better returns, increased transparency and regulatory demands, there is an increased push towards better tools and technology solutions. In this series we take a look at some of the challenges of current players in the market. Legacy software’s approach to business - Legacy software’s were written in early 2000 addressing the challenges of simpler asset management needs, and very old technology. They were designed to be “point solution” for the alternative asset managers, addressing needs of wither just the accounting or risk or trade management but never a complete data platform. Cost of the technology – The eco...