Digitisation is an important trend influencing new investments of PE funds : it means muting their operational and investment process but also widening their investment universe.
The explosion of data, analytics and connectivity has dramatically enhanced PE funds’ ability to assess companies
An enhancement to better analyse the markets and their opportunities : digital deal sourcing and diligenge changes:
- Deal sourcing is the first stage of the PE value chain. Using data analytics (as Social Media or other sources) to better identify targets as a complement to their existing channels, procedures, and processes. Benefits are a better evaluation from tremendous amount of unstructured data and a larger investment universe;
- Moreover, analytics, through diligence, provide more insights: to understand how the company performed relative to its competitors in several areas; to identify digital’s impact on their overarching investment thesis and the target’s valuation ; to calculate the risk and opportunities.
New tools to implement inside the holdings to create value :
- Technology ranking from PE funds to consider dealing with digitally transforming or new uses (Blockchain, AI, IoT, Virtual Reality, Robots, 3D Printing, Augmented Reality and Drones);
- Main expected benefits from digitisation into the holdings (boost revenue and market position, decrease redundancies and costs and create sustainable value).
New set of opportunities to bid and to support
New technologies are impacting our entire ecosystem by changing our consumption patterns, our managerial organizations, even the business model of many companies. They are reshaping cards in many sectors where new entrants can claim to dethrone market leaders.
Megatrends to be monitored with Impact or Traditional issues:
- Technological advances with four areas of progress (digitisation and the Internet of Things; automation and artificial intelligence; Fintech; and biotechnology and personalised medicine);
- Society and demographics (aging in western hemisphere, increase of middle classes in the Emerging, education…);
- Environmental challenges (to orchestrate a sustainable energy transition and green revolution for the future of the planet and our societies).
A wide range of opportunities for those investment players…