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Deal Tracking Software: A must-have for Private Equity firms to manage Deal Pipeline

With the rise in entrepreneurial spirit and rapid growth sought by companies, the market is flourishing with a growing number of investment opportunities. For a private equity firm, this increased volume of opportunities is nothing less than a boon. However, to tap the correct investment opportunity, it is crucial to properly manage this huge influx and evaluate each one of them based on the most appropriate and applicable criteria. To effectively manage such a quantum of investment opportunities, private equity firms are finding refuge in technology and moving to new-age deal tracking software instead of relying on traditional tools like spreadsheets.

There are multiple solutions offering deal tracking capabilities but very few provide deal tracking focused on the private equity domain. Managing and tracking private equity deals is a very different game where run-of-the-mill solutions can hardly be appropriate. The systems should be designed to suit the specific needs of private equity funds. Thus, when looking for private equity deal tracking software, one should look out for the following essential elements:

  • Simplicity – For the sake of easy technology adoption, the technology solutions should be simple and easy to use. The deal tracking software must have an intuitive user interface including easy tab navigation, quick action buttons, single data view for the deal team to view key deal parameters, focus deals or investment preferences, etc.
  • Compact View – It’s hard to keep an eye on each deal simultaneously. Thus, the deal tracking software must have the capability to showcase a summary of key deals, a mechanism to move around the focus deals, display when a deal requires attention, and send reminders if there is too much idle period on a deal. For example, a Kanban view with a compact view of deals with details such as deal size, deal stage, etc.
  • Quick Reporting – Evaluation of deals (and due diligence) is another area where technology can add huge value. The deal tracking software should be able to perform mundane tasks such as quick data analysis and generation and scheduling of reports in multiple formats so that the deal team can focus on the important aspects of deal closure, make informed decisions, and plan future strategies. Additionally, data should be available in such a format so that even subjective analysis can be done easily.
  • Task Automation – The real value that is derived from technology is its ability to facilitate team collaboration. The deal tracking software should enable the deal team to remain aligned with all deal-related communication and offer task automation such as sending emails, scheduling tasks, and sending reminders on completion of important milestones.
  • Multi-Device Support – In this mobile age, easy and secure access to information is crucial. The nature of private equity business is such that executives are always on the go and may require data access from remote locations. Hence, the deal tracking software should offer multi-device support for quick, secure, and easy access to information from any location across the globe.
  • Integrations – Private equity firms tend to employ different systems for different requirements starting from deal sourcing to deal evaluation to deal closure resulting in multiple sources of data. However, for optimal productivity, there should be a single source of truth. Therefore, a deal tracking software should offer seamless integration, enabling an unrestricted flow of data among the different systems.

Deal Tracking software is thus no more a nice-to-have but a necessary tool that not only improves the operation efficiency of the investment team of a private equity firm but also helps tremendously in taking quick and objective deal decisions.

Authored By: Saloni Gupta (Senior Manager – Sales & Key Accounts, PE Front Office)

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