Technology in PE
There are some interesting technologies that I have come across in private equity that I wanted to talk about and would love to hear feedback from you all. In structured products involving private equity, there are some compelling technologies involving cash flow modeling, risk analysis and other related tools. For instance, I know of one firm that has a database of over 400,000 private equity transactions (company-level information) over a period of 25+ years. More on this subject to come in the future. I have also come across companies like Simudyne (www.simudyne.com) who specialize in creating high powered modeling software and technologies for a variety of verticals. By deploying these complex simulations, Simudyne has realized staggering cost savings and efficiencies for companies such as $200 million in annual savings for P&G; $500 million ROI for Unilever over 3 years, and a variety of other examples in financial services, telecommunications, pharmaceuticals, etc. I guess my thinking is that tools like these might be of interest to the private equity world in order to maximize efficiences and cost reductions for their portfolio companies. Some feedback has been that these firms are a dime a dozen, however, I have not been able to find similar offerings. What I would be interested in discussing further is the use of technology (like the ideas I presented above to begin the dialogue) in helping the private equity world (LPs, GPs, etc.) maximize value and returns. Who are some other players out there? What is the appetite out there for enhanced analytics and other tools? I would love to hear from you all. Feel free to contact me.
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Andy Choi said on November 8, 2006
Jon, nice one. I have been thinking about the same thing recently as well. With Internet companies, there is so much data which can be collected and tracked – I wonder if one can employ some quant methods in predicting the future growth rate, etc.
Adrian Garcia said on November 13, 2006
I am very interested in this topic. We’ve been using mostly MergerMarket and Thomson Financial to get a comprehensive coverage of PE Deals and GP involved in selected industries. We also subsribe to Private Equity International, but don’t know of any good sources out there for PE. Technology should definetely be a primary tool for firm’s knowledge acquisition.
Adrian Garcia said on November 13, 2006
I would actually like to see more posts here on the topic of research resources. We are a small I-Bank/PE Firm in Central America with 25 professionals, and technology is a key ally in work for our cases. WE try to leverage our experience with news and trends in the industry and in the business world in developed countries, and we highly value the data from sources such as MergerMarket or Thomson Financial, even printed publications such as Private Equity International and Venture Equity Latin America.
I would like to know what are the top 3 technology tools or resources used the most by PE firms in this forum. Thanks.
Prince Dufer said on October 10, 2010
The whole thing becomes a vicious cycle. This is the major reason people fail at traditional dieting.