How Asset Managers become better Deal Makers

If you cannot track them, you cannot measure them.

– Anonymous.

Private Markets for deals in Asset Management have become extremely competitive. There is more capital in the market than deals, and managers are often chasing similar opportunities.

Manual (yes, Excel is “manual”) deal tracking processes invite sloppiness, risk losses in the portfolio, and cannot be approved systematically. Yet 63% of Private Capital Managers use manual processes to manage deals in the pipeline. Their typical excuses for not using all that tech providers have offered include:

1. The technology is too expensive. . .
2. . . . and is too difficult to use
3. . . .nor does it integrate with my other enterprise systems
4. besides, I know every deal like the back of my hand

While we see the point of the first three, and are not super-human enough to get #4, countering all of these are observations that our clients have made:

1. Good deals were not just dumb luck, but happened because the managers sourced them, worked on them diligently and made sure they were fully prepared, with every fact of the deal available, all through deal tracking.
2. Deal Tracking made the deal process extremely efficient. Clients knew which deals they had in their pipeline and what was lacking. They knew which deals got stuck at which stage, and how to move them forward. They could track who were their better partners and who were time sinks. It gave them a great view into what was working and what needed to be improved. They were proactive on the ‘mission critical’ alerts.
3. Clients often tinkered with the different stages in managing deal pipelines. Every Asset Manager had its own “Deal Stages” and an ability to create a fine tuned process for each stage. They obsessed about keeping all their records together. Managers mentioned that they spent time on a deal’s progress looking through its progression page.
4. Automating the deal tracking process greatly increased the quality of deal making. Some features identified that were of big help included Automatic reminders, email integrations, and ability to add Notes to every deal. Deal metrics helped reduce time to close a deal, and made each team member more responsive.
5. The archive of dead deals became a rich repository of market information, that clients were able to leverage for doing new deals.

In essence, Deal Tracking systems so greatly enhanced the ability to identify better deals, and to add significant values to portfolios that managers who have adopted Deal Tracking systems did not see the value in returning back to a manual process.