Due to inflationary pressures and uncertainty surrounding asset valuations, private equity (PE) fundraising and deal activity have slowed down since 2022. During the turmoil, PE firms are focusing more on reducing costs and making adjustments to their due diligence practices.
But how? Lynk believes that an effective knowledge management strategy combined with digital tools can give PE firms an edge when sourcing and evaluating deals, as well as creating value from investments. In this article, we address some challenges we learned from PE firms when adapting to market volatility, and how Lynk’s knowledge infrastructure eliminates the pain points and helps PE firms gain an advantage during the deal lifecycle.
1. Lack of an all-in-one platform to engage with experts and advisors. Investors and fund managers need to engage with subject matter experts to understand market trends and uncover new deals. They also need built-in compliance and security checks to make sure the insights they gained are confidential and credible.
2. Challenges of reducing the cost from expert engagement. Firms spend huge amounts of money on expert consultations, and calling experts from different platforms costs more money and time while the outcome might not be satisfactory.
3. Lacking infrastructure to systematically track knowledge interaction. While engaging with advisors or experts, it can be difficult to track interactions and retrieve past consultations for useful insights. Meanwhile, some PE firms acknowledged the need for an efficient private network to interact with the portfolio as part of their value-creation efforts.
4. Identify the right person with relevant knowledge within organized networks. It is challenging for PE firms to find the right person, advisors or external resources for their portfolio with their massive networks.
5. Overwhelmed by digital tools to manage contents which lack efficiency. The complexity of various digital tools and analysis methods make it challenging for PE firms to quickly access functional knowledge and expertise.
1. Lynk Circle is a purpose-built software solution that serves as a knowledge infrastructure for businesses and organizations to create their own AI-driven knowledge networks. In the case of PE firms, Lynk Circle helps them to build an all-in-one structured platform to engage with experts, track knowledge interaction and involve portfolio companies for value creation.
2. Through Lynk Circles, PE firms can build a private advisor network that will support maintenance and expansion activities. Circle provides investors with a branded digital interface through which they can invite advisors and experts to join their network to scale the operating capacity. Meanwhile, firms can have it be accessible by the portfolio companies which enables knowledge and resource sharing. Firms have the full control of who can access the network.
3. With the Circle, firms can engage directly with advisors and then retain the information from those engagements to know who knows what in a short time, allowing for better placements on boards and management. The platform enables different interaction modules for users to engage with advisors, experts and peers immediately. Users can access documented past engagement any time. Full direct engagement support includes fast compliance checks, payment and contracts.
4. Lynk Circle helps PE firms to build value creation tools for their portfolio companies. Firms can curate a specific group—workspace in their Circle to help a certain portfolio company by easily adding advisors/experts from the search page to the workspace.
5. Lynk Circle helps PE firms to showcase their advisor network to current and future LPs, helping to deepen the relationship between firms, LPs and third party stakeholders. While PE firms support their portfolio companies by providing additional financing and expertise, they also need to gain trust and meet expectations of LPs.
To understand more about how Lynk Circle helps PE firms build advisor network and generate value for the portfolio, watch our Lynk Circle use case webinar here.