Alt Goes Mainstream: The Latest on Alternative Investments, WealthTech, & Private Markets
00:27:18 · Yann Magnan, Michael Sidgmore
[00:27:18] S1: or debt is an instrument, but if you're getting that data from the get everything you need for sure and more. And that's why we start thinking, well, I get all these data, actually, I can probably do much more with that data. [00:27:31] S0: So that brings up a really interesting follow-up to that, which is you're working with both the private equity side of certain firms as well as the private credit side of these firms. There are obviously different valuation methodologies, and you have different structures and processes for the products that you sell to each business unit. Is there any crossover connective tissue in terms of sharing some of that data with... Obviously, only within a single fund or firm, but where it may actually help that firm on the private equity side or the private credit side if you have data from the other perspective business unit based on what you just said?
00:27:31 · Michael Sidgmore, Yann Magnan
[00:27:31] S0: So that brings up a really interesting follow-up to that, which is you're working with both the private equity side of certain firms as well as the private credit side of these firms. There are obviously different valuation methodologies, and you have different structures and processes for the products that you sell to each business unit. Is there any crossover connective tissue in terms of sharing some of that data with... Obviously, only within a single fund or firm, but where it may actually help that firm on the private equity side or the private credit side if you have data from the other perspective business unit based on what you just said? [00:28:11] S1: The answer is yes. I would say in theory, because in practice, there might be situation where even within the same GP, you can't share information from one phone to another one, as simple as that. But in practice, is doable is that once you have collected all these data, once you have allocated to the portfolio companies, something that could be called like a unique identifying number or something like that, then if one party agrees to share that data with another party because they have an interest to do it, can can just be done automatically. It's just there. It's not just that you're sharing the data, by way. You're sharing the data with the underlying source document with all the audit thread that goes with it. The amount of time saved, plus the comfort that you give to your LPs and to your auditors is just massive.
00:28:11 · Yann Magnan, Michael Sidgmore
[00:28:11] S1: The answer is yes. I would say in theory, because in practice, there might be situation where even within the same GP, you can't share information from one phone to another one, as simple as that. But in practice, is doable is that once you have collected all these data, once you have allocated to the portfolio companies, something that could be called like a unique identifying number or something like that, then if one party agrees to share that data with another party because they have an interest to do it, can can just be done automatically. It's just there. It's not just that you're sharing the data, by way. You're sharing the data with the underlying source document with all the audit thread that goes with it. The amount of time saved, plus the comfort that you give to your LPs and to your auditors is just massive. [00:29:01] S0: Brings rise to a really interesting concept, which is another trend we're seeing in private markets is the big firms are getting bigger. They're adding different investment strategies or funds to their platform, and they're becoming multistrat. So the ability to actually leverage all the data they have across the different business units, I imagine, would be helpful over time.
00:29:01 · Michael Sidgmore, Yann Magnan
[00:29:01] S0: Brings rise to a really interesting concept, which is another trend we're seeing in private markets is the big firms are getting bigger. They're adding different investment strategies or funds to their platform, and they're becoming multistrat. So the ability to actually leverage all the data they have across the different business units, I imagine, would be helpful over time. [00:29:24] S1: It's not that it would be full. I think that's going to be the next gold mine of industry. That's where definitely size will matter. I mean, matters on many things, but in particular on that, the bigger you are, more investment you have done, the more various use cases you've been able to see. If you have all this data and you have standardized that data and you can use that with proper set of calculation, algos, however you call that, then you're getting so much smarter than your competitor. As simple as that. Smarter, faster. If you're capable of informing your investment team few weeks earlier than your competitors, hey, we are saying something here, there's a pattern, there might be a risk that is coming up, you should speak to that company. I mean, that's invaluable, I think. [00:30:12] S0: Brings up a really interesting question, which is, do you think the automation of a lot of this data will benefit the larger firms more than the smaller firms
00:30:12 · Michael Sidgmore, Yann Magnan
[00:30:12] S0: Brings up a really interesting question, which is, do you think the automation of a lot of this data will benefit the larger firms more than the smaller firms [00:30:22] S1: or vice versa? It will benefit the larger firms because they have a capacity to move faster, definitely. The smaller firms, they will need to react pretty fast, definitely, to make sure that they keep up with that trend. And they will need to find ways as well to complement their dataset if their existing dataset is a bit limited. [00:30:49] S0: Yeah. I mean, it's interesting because on one hand, smaller firms can leverage technology like 73 to automate a lot of what they would do in the post investment processes and in their operations function. So they may not need to hire as many people. Obviously, they'll still have to work with service providers as everybody will. But does that benefit them from a cost perspective as much as it would benefit a larger firm who will probably have more people, more assets to value and track, but also they get the benefit of that too? [00:31:16] S1: I would say that our pricing model is developed in a way that, yeah, I mean, it's going to create value for everybody.
00:31:16 · Yann Magnan, Michael Sidgmore
[00:31:16] S1: I would say that our pricing model is developed in a way that, yeah, I mean, it's going to create value for everybody. [00:31:23] S0: So brings up an interesting question from a business building perspective as you build a business in private markets. You've chosen, and for good reason, to work with many of the largest firms in the industry. What did it take to build technology from the relative outset to work with the industry's largest firms? A lot of startups will start bottoms up and go upstream, starting with smaller customers and then growing in size and scale to the enterprise level as they build their business, particularly in enterprise or enterprise software vertical SaaS. You chose to work with the largest firms first. Why did you do that? And what was the thought process behind that?