Turning Point in Private Equity: Affecting LPs and GPs
June 18, 2019
June 18, 2019
Key Takeaways from the Digital Transformation in Private Equity Webinar
Last week, Cobalt hosted a webinar around the recent turning point of digital transformation within private equity. This webinar covered key points around:
- The changing landscape in private equity.
- What factors impact decision making for investors.
- How technology systems, like Cobalt, can positively impact LPs and GPs.
Uniquely, this turning point is affecting both LPs and GPs.
The Turning Point for LPs
For LPs, over the past twenty years, the private markets have grown and diversified. LPs are seeing an increasing number of options by geography and strategy. In other words, investors have more choice than ever before.
Because of this, LPs focus on tactical fund choices to help seek to drive outperformance in their private markets portfolio. Today’s investors are leveraging streamlined, automated methods to cut up track records and drive decision making. More importantly, for LPs, improving marginally in investment selection decisions can potentially translate into hundreds of extra basis points in performance.
The Turning Point for GPs
For GPs, they are seeing a resulting increase in demand due to the success of the private markets. To meet that demand, there are new firm spin-off groups entering the market, new fund fundraising and new unique fund structures. Additionally, there are expanding investment opportunities in emerging global economies. As a result, all this has added to the growth of the industry.
With increased opportunity in the market, GPs are arming themselves with technology as well. Accordingly, managers are using technology to differentiate themselves by understanding how to best position their performance. In other words, GPs aim to leverage their data to highlight how their strategy drives value.