Renee Noto Offers Insights on US Middle Market Investment in Private Equity Wire’s Special Report: Private Equity Global Outlook 2020
By Mark Kitchen
29/01/2020 – 8:24 AM
2020 Top 10 tech predictions – To introduce the Private Equity Wire Global Outlook Report 2020, the team at RFA has made the following 10 predictions on technology and how they might impact the industry over the next 12 months. We took a considered approach before settling on these 10 trends based on what we’ve seen across our client base, the conversations we’ve had (and continue to have) on a daily basis, as well as from research into business drivers and emerging technology:
- Spend on technology will increase (for successful firms anyway). Studies show that profitable firms spend proportionately more on technology than their counterparts with shrinking margins. Interesting that the old adage “spend to accumulate” is appropriate for technology spend too.
- Hybrid and public cloud use will increase as the major vendors continue to add more services. BUT this will add complexity so managers will need to engage with experts in public cloud management.
- SaaS adoption will continue to rise due to its simplicity, reliability and predictability. From OMS to CRM systems, SaaS adoption is growing.
- Serverless Computing will continue to grow in popularity simplifying operations and enabling agility for managers.
- Data analytics intelligence will improve workforce optimisation and inform product and service transformation. This is a huge growth area across the sector – we have multiple projects going on with clients to give them better data analytics as well as live dashboards and cloud based data warehousing.
- The “digital workspace” will be even more important. Employees expect and will soon demand the freedom, the flexibility and tools to do their jobs well from anywhere without relying on phones or email.
- Alternative fund managers will use AI technology to power automation solutions that will drive efficiencies and allow them to do more with less manpower as well as utilising automation tools within workflow management.
- Managers will strive to keep headcounts as lean as possible. They will do this by continuing to outsource functions.
- Security Operations, Automation and Response (SOAR) will be the buzz phrase of 2020. As attacks increase in velocity and sophistication, so responses must become faster. Intelligent cybersecurity is the way forward.
- Technology Risk Management will take centre stage in 2020. Risk assessments are critical for alternative fund managers.
THE MACRO PICTURE
What is your outlook for US middle market investing?
Renee Noto, President, Brightstar Capital Partners
Even though the total number of US middle market private companies far exceeds the number of public companies, the landscape for private capital investments continues to become more competitive. True proprietary deals require more time, more work and new ways of discovery. Since inception, we have been deliberately proactive about expanding our network of relationships among founder and family-owned companies in the United States.
We made a purposeful decision to invest in the infrastructure necessary to build on our strong ties with the communities and business associations that can be sources of proprietary deal flow, and in a communications network that reaches the right target audiences.
In 2020, private equity firms will need to prove they are true value-added partners to the businesses they look to acquire, not just capital. Identifying opportunities to add value will be increasingly difficult in an environment where prices for assets are reaching all-time highs. Firms will need to innovate and think of new ways to approach finding investment opportunities.
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