Alt Goes Mainstream: The Latest on Alternative Investments, WealthTech, & Private Markets
00:34:15 · Michael Sidgmore, Venkat Subramaniam
[00:34:15] S1: Do you think more technology in private markets will start from bottom up, single source of truth on up? [00:34:22] S2: I think so. Absolutely. That's the way to go. I think if you start from bottom up, possibilities open up. Top down, I think you're limited by the quality of data here because you're always reliant on the underlying data. But if you start from bottom up, you can build... Carta is a good example on the venture side. I think they started... If you look at where where they're going now, they started with cap table, which is bottom up. But now they're kind of using all this data in the venture fund business. Yeah. [00:34:50] S1: I mean, that's a really interesting point, and I think that gets to the experience or talent question in private markets. Do you think it requires someone who came from industry and was a practitioner to be able to go bottom up? Because you actually have to understand the problem in a way that you actually dealt with it.
00:34:50 · Michael Sidgmore, Venkat Subramaniam
[00:34:50] S1: I mean, that's a really interesting point, and I think that gets to the experience or talent question in private markets. Do you think it requires someone who came from industry and was a practitioner to be able to go bottom up? Because you actually have to understand the problem in a way that you actually dealt with it. [00:35:05] S2: It's a very interesting question. I think my view is you need to understand the problem, but you need to be passionate about the problem. You need to feel very strongly about the problem, and you need to have the desire to solve it. I think if you don't have the latter, it becomes very difficult when you're building because building is challenging. Because building is not just building software and silos, it's stakeholder management. It's lots of other things. But I think one benefit people from the industry have is they understand the problem, and that's half the battle won. And then if you're passionate about their problem and you feel strongly, then you're off to the races. The difficulty is always engineering. Right? Because you need to very quickly learn that. So you will need to invest time in some place. I'd rather try and understand engineering... Rather know the problem and be passionate about it than be an engineer in in the problem that we are solving because it's very esoteric. It's very complex. And once you're passionate about the problem, you know it, it becomes easier.
00:35:05 · Venkat Subramaniam, Michael Sidgmore
[00:35:05] S2: It's a very interesting question. I think my view is you need to understand the problem, but you need to be passionate about the problem. You need to feel very strongly about the problem, and you need to have the desire to solve it. I think if you don't have the latter, it becomes very difficult when you're building because building is challenging. Because building is not just building software and silos, it's stakeholder management. It's lots of other things. But I think one benefit people from the industry have is they understand the problem, and that's half the battle won. And then if you're passionate about their problem and you feel strongly, then you're off to the races. The difficulty is always engineering. Right? Because you need to very quickly learn that. So you will need to invest time in some place. I'd rather try and understand engineering... Rather know the problem and be passionate about it than be an engineer in in the problem that we are solving because it's very esoteric. It's very complex. And once you're passionate about the problem, you know it, it becomes easier. [00:36:03] S1: On the flip side, you work with a number of different private equity firms, large, small, different jurisdictions. Do you find that they have very different problems that they're looking to solve, or they all have a similar problem that they wanna solve when it comes to cap table management and back office software? So every PE fund will feel that they are unique,
00:36:25 · Venkat Subramaniam
[00:36:25] S2: and they will be unique in many ways because it's a people organization. And so individuals are very different, and there'll be different ways in which they're working. When you drill into the data and when you start looking at breakdown the processes, quarterly evaluations, what tax is doing, what legal is doing, it's the same. And the dataset is the same. So the the beauty with the software is you can bring them all together and you can create those process, allow people to do what they've been doing and contribute a lot better. But we don't see a major difference between large and small. Where we see a difference is getting them the behavioral change. I think in smaller funds, as we discussed earlier, it's a lot easier to get the behavioral change going. Whereas in the larger fund, if it doesn't come from top down, it can take a lot longer. Because people carry on working in Excels. They may not connect the dots. Somebody doing quality evaluations might be passionate about those Excel files, and they might be very keen to do the way they're doing it without realizing what it means from a kind of larger standpoint. So you need the decisions to come in from top down, and then you can... To affect behavioral change. Smaller funds is easier because the people who are the decision makers often are also the people who are experiencing the problem. So it's concentrated.
00:37:40 · Michael Sidgmore, Venkat Subramaniam
[00:37:40] S1: So it's easier. What's interesting about that too is I think private markets is undergoing such a technological transformation, and the industry feels, certainly right now, that it's moving so fast. Need to get into the wealth channel. These businesses, as asset managers, are evolving so rapidly. There's more players in private markets. There's new product creation around Evergreens, etcetera. Do you think that we're gonna just see really rapid transformation of private market software, or do you think it's kind of slow, slow, slow, and then all of a sudden it's gonna speed up at some point in the future? [00:38:13] S2: I think there'll be a a rapid one happening in the next five to ten years. I think that's pretty obvious to us now. A lot of the hard work has happened in the last three, four, five years. I think we are seeing there'll be a much faster transition happening over the next five to ten years. We are very excited about what's coming in the next ten years. And ten years is a right horizon to look at. But even in the next three to five years, things are changing very rapidly. Well, you're gonna be a big part [00:38:39] S1: of that change. Everything you're building, I think, so important to think about how do you actually make the processes more efficient. And like you said, it really ties into everything that a firm does. That's so important. It's such
00:38:39 · Michael Sidgmore, Venkat Subramaniam
[00:38:39] S1: of that change. Everything you're building, I think, so important to think about how do you actually make the processes more efficient. And like you said, it really ties into everything that a firm does. That's so important. It's such [00:38:51] S2: an important part. There's only two things. If you break down the private markets business, there's investors, and then there's assets. And we we want to be at the heart of what those assets are and what they actually own. And we are very excited about the process. And and the industry is also very much buying into the digital transformation age, which makes it even more exciting for us. [00:39:11] S1: So we are moving from the stone age to the digital age. I love it. Well, thanks so much for coming on the show, Venkat. [00:39:16] S2: Thank you, Michael. Thanks. Great to have you. [00:39:20] S1: Thanks for listening to this episode of Alt Goes Mainstream. I hope you enjoyed it. You can read more about Alt at my Substack, altgoesmainstream.substack.com. Thanks a lot, and have a great day.