Karan Mehra is the CEO of Tyke, an investment platform that aggregates a bouquet of prospective community stocks and allows retail investors to invest digitally. Within the purview of his professional responsibilities at the organization, he strategizes the financial framework, contrives and contributes to product development, orchestrates and aligns the corporate vision, and plans for fundraising. Overall, Karan supervises the fluid functioning of all departments while having a vantage view of the holistic development of the organization.
For a long time, the private equity industry has depended on financial engineering to generate value creation in portfolio firms. This method was successful for the first couple decades of its existence. With a significant rise in main and secondary acquisitions, as well as greater rivalry for the purchase of valuable targets, the focus has changed from debt and corporate restructuring to performance improvement to drive portfolio value creation. As the emphasis shifts to operational value generation, private equity firms are seeking new ways to enhance portfolio performance. Digital has been shown to be a powerful lever to affect financial performance in a variety of sectors, having a disruptive impact across enterprises.
The digital springboard: How digital technologies are transforming private equity sector
Investors have taken cognizance of the need for technology that assists them in automating formerly manual aspects of the process of investing in private equity, especially when it comes to the aggregation of data. The requirement for repeatable and automated processes and systems has always been an essential one for private equity investors. However, it has recently been brought to the forefront as a result of the continued rise of remote work and the increased interest of private capital investors in the asset class.
Today, private equity companies are turning to digital data management systems as a way to relieve the rising burden on resources and to better manage the regulatory and compliance obligations that are placed on them. Monitoring limited partnership agreements and side letter provisions is one of the things that compliance teams need to do in addition to other tasks in order to meet these obligations. The latter may be subject to extensive negotiations with individual limited partners, and it may involve significant extra obligations that need to be monitored on an ongoing basis. In this way, businesses may use automated reporting systems to make threshold warnings and other useful information.
Ingenious investment: How technology is creating the revolutionary private investment gateways
Some trailblazing players in the market have been the propellers in digitizing and democratizing the private investment avenues available to retail investors, angel investors, and venture capitalists. These digital platforms enable entrepreneurs to make a pitch to investors on the platform, raise funding, and fabricate strong communities that back these businesses. It creates a synergy between investors and entrepreneurs and helps to mediate commercial bonding. Being avant-garde in its operability, it can handle the necessary documentation and signatures before powering the money transfer instantaneously using its unique software. These exclusively digital portals for private investment are leveraging the virtues of Fintech to create an advantageous path for retail entrepreneurs, retail investors, angel networks, and venture capitalists.
Conclusion
General partners (GPs) are embracing digital throughout the value chain, from portfolio company monitoring to deal sourcing and analyzing market dynamics, possible white space, and buyer preferences. We are also seeing greater interest in AI and analytics to assist with asset screening, such as determining receptivity to PE investment, evaluating organizational capabilities, product portfolios, and website traffic. Similarly, private equity companies are progressively developing digital private investor portals to serve as a gateway for all interactions with private entrepreneurs, including proprietary analytics tools that automate investor reporting by giving them key insights on the performance of their investments.