Strategy Execution Blog

Planning for an uncertain 2021

Planning for an uncertain 2021

We are on the homestretch of 2020 and staring at a very uncertain year ahead. The global community has thrown around the term ‘the new normal’ over the past 6 months, and for many that means to expect the unexpected. We can count on further lockdowns and the Brexit deadline over the next quarter, but what else awaits in 2021?

Private Equity managers wasted no time in getting back in to deal making in Q3 and will be looking to navigate the variable market conditions that await their portfolio companies. Pitchbook noted that exits are down, due to uncertain markets, and this means managers will have larger portfolios and a larger workload for Portfolio Managers moving into the unknown that is 2021.

Navigating what is to come

How can today’s fund managers navigate what is to come? As markets for certain industries fluctuate based on the pandemic, managers need to have closer control of the board in order to orchestrate changes quickly. These changes may result in further investment to capture market share, or loss mitigation. In either scenario, having reliable tools to communicate and track the progress of these directions will ensure alignment and follow-through.

A recent paper from Nasdaq and Stanton Chase covered how boards have responded to the crisis so far. They found that just over a quarter of companies surveyed confirmed their boards utilise digital services for board and collaboration software. This is surprising; would a fund manager source a deal without an origination database or send a capital call without a fund accounting system? Why would a fund manage its most important assets without a purpose-built tool designed for value creation and strategy execution?

The paper from Nasdaq and Stanton Chase goes on to say, “A path of ongoing technological advancement at the board level and throughout the organization can lend to more effective strategic meetings, collaboration, governance, and decision-making.”

We could not agree more, the top tier PE firms are using strategic tools within their portfolio to drive alignment and implement and track new business strategy when the market dictates. Firms that are relying on outdated tools may have to scramble to overcome the next lockdown or an unknown outcome of Brexit.

Technology to help steer a clearer path through 2021

Throughout the Coronavirus pandemic, EXM has helped Private Equity Managers navigate their way through the many challenges that have arisen.

From conversations with PE houses over the last few months we know that companies that were already making use of advanced technology to manage and track their value creation have been able to react much more quickly to the situation. Our White Paper findings also showed that the collaboration between GP funds and companies in the value-creation process will intensify, because the pandemic has shown the benefits of aligning investors and management teams.

Juan Manrique, CEO of EXM comments "our customers have realised this year they need to do something different and need closer control of assets and better communication with their investment teams and by employing more advanced software and systems to do this will help them steer a clearer path through 2021".

EXM is the first solution dedicated to Value Creation planning and execution for Private Equity. Bringing together Value planning and Portfolio Monitoring into one single platform. From automated data extraction at asset level to sophisticated financial and operational reports for quarterly information to LPs, including IRR and Multiples calculation, EXM ensures data you can trust, knowledge you can leverage and insight to optimise your value creation. Download our brochure for more information on how EXM could help support your efforts in steering a clearer path through 2021.

 

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Topics: value creation, private equity, portfolio managers