#fintech

Alternative Asset Technology & Services

LLR believe the alternative asset industry is no longer benefitting from the tailwinds of broadly increasing valuations and positive macro trends to succeed in fundraising and deployment. While many recognize the importance of technology, the majority of firms remain early in their adoption curve.

Underpinned by record levels of competition, heightened investor scrutiny of firms, and our experience investing in the WealthTech ecosystem, LLR is seeking opportunities to invest in the mission-critical components of an alternative investment manager’s workflow. Companies and intermediaries working in this space should contact Sam Ryder to discuss relevant opportunities.

The demand for greater transparency and improved operational efficiencies among investment managers is driving increased adoption of digital tools that span firm operations from streamlining fundraising communications to offering greater visibility into post-investment performance.

Sam Ryder, Principal, LLR Partners

What's driving adoption of Alternative Asset Tech & Services

Increasingly Competitive Deal Environment

As competition for deals has increased, speed and efficiency of diligence to close is driving demand for automation across the investment process.

Lack of Reporting on Value Creation

As firms trend towards underwriting to value creation vs. multiple arbitrage, we believe the majority still lack tools to track progress against value creation plans.

Communications Expectations

Improved transparency between LPs and GPs is a key area for over half (55%) of investors3, and 43% of institutional LPs strongly agree that near real-time reporting will need to be employed by their GPs in the next five years.4

Evolving Role of AI Pre-Investment

Data aggregation and AI-supported origination tools are increasing sourcing efficiency and deal flow. 43% of funds state that advanced data analytics can benefit deal sourcing more than any other stage in the dealmaking process.2

Areas of Focus for Investment

LLR believes there are opportunities to invest in mission critical components of the alternative investment manager workflow’s across the front-, middle- and back-office, including:

  • Investment origination and fundraising intelligence
  • Diligence workflow management
  • Data aggregation and performance reporting
  • Value creation management
  • Fund administration and LP communications

A Market Ripe for Adoption

7%
1
of U.S. private funds have fully implemented technology solutions
74%
2
of LPs believe investor reporting is most likely to improve through technology

See You There?

November 19, 2024
Schwab Impact
Meet us in our hometown of Philadelphia
October 27, 2024
Money 20/20
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Meet the LLR Team

References

  1. “2022 Global Private Equity Outlook,” S&P Global Market Intelligence, 2022, https://www.spglobal.com/marketintelligence/en/news-insights/research/2022-global-private-equity-outlook
  2. “Prequin Special Report: The Future of Alternatives 2025,” Prequin, 2020, https://oss.cyzone.cn/2021/0121/0126eb26887531b1621982b5191bbd19.pdf
  3. “The Future of Private Equity Regulation,” ILPA, 2023, https://ilpa.org/wp-content/uploads/2023/03/ILPA-SEC-Private-Fund-Advisers-Analysis.pdf
  4. “Fund Administration Technology: Private Equity’s New Differentiator,” Gen II Fund, 2023, https://gen2fund.com/wp-content/uploads/2023/05/GenIIFund_PEReport_2023-FINAL.pdf
Disclaimer:

The information presented herein is intended for an audience of potential LLR portfolio companies and the intermediaries supporting their capital raise processes. Named LLR investments presented herein do not reflect a complete list of LLR investments and are provided for informational purposes only. Certain statements about LLR made by portfolio company executives and other quoted parties herein are intended to illustrate the work of LLR’s Value Creation Team with such portfolio companies or reflect the individual’s perspective on the featured industry sector. Such portfolio companies are controlled by investment vehicles managed by LLR. Quoted parties were not compensated in connection with their participation, although they generally receive compensation and investment opportunities in connection with their portfolio company or Senior Operating Advisor roles, and in certain cases are also owners of portfolio company securities and/or investors in LLR-sponsored vehicles. Such compensation and investments subject participants to potential conflicts of interest in making the statements herein.