A recent webinar discussion explored important lessons learned during the pandemic as to how operations can be more efficient and effective as we enter a hybrid model of working.

On the panel:

Rebecca Boscott, COO, Hanover Investors Management

Katja Baur, CFO, Montana Capital Partners

John Zilinskis, CTO asset management and alternatives, FIS

Host: Alice Murray, Editor, The Drawdown

It’s clear we will not return to old ways of working; that a hybrid model of office and remote working will be one of the lasting effects of the pandemic. Against this backdrop, a recent webinar discussion explored how private equity firms are motivating teams, remaining collaborative as we oscillate between lockdowns and working remotely, as well as driving operational efficiency within a distributed workforce.

Private equity is a naturally high paced environment - what technology and tools are you using to help with productivity, both internally and externally?

Rebecca Boscott: We’ve been looking at any way technology can aid execution and tasks; we’ve taken full advantage of video conferencing and instant messaging applications. One initiative we introduced last year was a project management system, which really came into its own during this period. It’s been useful to see how team members are progressing without having to email or chase them. We also introduced company secretarial software and that has already really improved productivity.

Katja Baur: We launched our fundraise at the beginning of the lockdown. We used Zoom extensively for calls with investors, lengthy operational due diligence meetings and for our annual investor meeting. It was a different experience, but it very quickly became more normal.

John Zilinskis: Demonstrating operational control has been a real challenge here. The greatest challenge is for smaller firms where teams were previously in one location. There’s pressure to leverage technology and we’ve seen that on internal controls around operations and accounting. For LP communications, there’s been greater use of portals. These were traditionally a way to deliver documents, but now firms are hosting AGMs and boosting two-way communications.

What have we learned that we’re going to take into the new norm?

Zilinskis: This industry has largely been paper-based; PDFs and Excel. Now, there’s more drive than ever to standardise. Cloud based solutions are coming through; the ability to access and exchange information is critical. It’s an evolution in terms of moving from paper-based into tech systems; looking at how you can automate through Artificial Intelligence and Machine Learning, how to ingest unstructured documents and systematize that. And, it’s about getting the data processes in place so it can be reported on, analysed and consumed, both internally and externally.

Baur: The pandemic has been more about how we manage internal processes. Prior to this, we could simply ask each other where valuations are, what’s been done and what hasn’t. Implementing tools to gain a real time view on the portfolio and where we stand; that’s certainly where we feel the difference of not being together. And as John said, a push for standardisation would make that much easier.

Boscott: We’ve recently brought in a data warehouse and data visualization tools to make reporting slicker and easier. We’re also looking at leveraging the project management software to set up templates for all of our standard processes - to Katja’s point; for a real time view of where we are with various tasks.

Thinking ahead, how important will third parties and software solutions be in terms of developing and growing your firm in 2021?

Baur: In terms of service providers, there has been more consideration around how we monitor them and get comfortable with their business continuity plan. In a situation like this it’s not just us but also our partners.

Zilinskis: We’ve definitely seen an acceleration for SaaS. Teams are no longer seeing the benefit of running systems in house and they want to either move into the public cloud or go full SaaS. From a BPaaS perspective; for smaller firms, it’s their ability or desire to handle these processes, and there’s a drive to outsourcing some of the common activity, such as collecting unstructured quarterly report data and getting that into systems.

Key takeaways:

Boscott: Technology is a tool, and if it’s used in that way it can increase efficiencies. It’s important to have rules and to implement tech hygiene to make sure you’re using the tech and it’s not using you. There will be a drive towards using cloud based services and the importance will be on ensuring different systems are connected up so you can use them effectively.

Baur: The pandemic has pushed us to use more technology and we found that we could raise a fund without travelling. I don’t think we’ll go back to how we used to work, but at the same time, private equity is very people driven and tech will never fully replace personal interactions.

Zilinskis: The situation has definitely given us opportunities to think about how we can use tech to optimise and enhance our businesss. Private equity continues to grow and we can leverage tech to enable the operations to keep pace with that growth.