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Private Capital

Four ways technology is shaping investor strategies and relations

Posted by on 16 March 2021
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As the pandemic has taken hold globally, there had been a great shift to digital and new technology has infiltrated the way the industry operates on a daily basis. Ben McNamara, producer of SuperTechnology North America 2021, highlights the four biggest themes that are shaping the investor strategies and relationships within private capital. 

#1: Due diligence, relationship building, and the new digital era

While many may relish the break from busy commutes in the mornings, the new digital and home-based way of working have been more challenging than initially thought.

Firstly, there has been no consensus among GPs and LPs about how to do due diligence remotely. For some, meeting in person is a no-go. For others, meeting before investing is essential. So, what are the reasons some are doing a face-to-face and other not? And to what end could technology be employed to mitigate the problems? Since the SuperTechnology conference we are now starting to see a shift in view – previously it was managing in difficult times, but now the focus is when (not if) this passes, what will continue to be best practice?

During the last 12 months, new tools and techniques have been used to create efficiency, provide clarity, and drive performance. The panels discussed apps and software like Slack and Clubhouse as tools that have become the main data-sharing devices for them and their teams. Not only this, but there is a sense that conversations are opening between investors and GPs in a way that they were not before due to the lack of technological adoption.

As we move out of Q1 adoption and adaption is likely to continue, but whether today’s methods are retained beyond necessity will be interesting to see in H2.

What kind of disruption and opportunities do you see for 2021? Mark Suster, Managing Partner at Upfront Ventures discusses the changes brought by the accelerated onset of digital and technological transformation.

#2: The LP perspective on technology funds and investments

Technology funds and businesses have out-performed in many respects during the pandemic – from ‘Pure-Tech’ to ‘Tech-Enabled’ businesses, as well as niche to generalist tech funds. It’s essential for LPs to get into the great funds and businesses early to ensure they don’t miss out on these opportunities.

Before the pandemic took hold in North America, there was a growing marketplace of new managers and spinouts, creating more options for LPs looking to deliver on a particular investment strategy. Our LP panel discussed whether LPs were comfortable with new managers without an established track record today, and if the ability to meet more managers via Zoom, meant that LPs are willing to consider a wide range of GPs – one commented that ‘if a manager reached out to us 12months ago by suggesting a zoom call first, we would have been slightly offended’ concluded that ‘now it is probably the more welcome approach.’

As we head into 2021, there is a sense of change and anticipation for what the year may hold. But the ‘absolute necessity of data’ has meant LPs are not going to invest lightly rather they will look to increase their own capability to process and analyse that data.

The scene will be set by Jonathan Grabel, Chief Investment Officer at LACERA (Los Angeles County Retirement Association), as he provides a 360-degree view on LPs’ thoughts today. Watch the session here.

#3: Family Offices investigating technology investments

As more Family Offices across North America have started looking at direct deals and investment opportunities, there is a growing interest in VC funds and direct opportunities. As the drivers for investment are different from family to family, what is creating the most interest and what is attractive to them in the current landscape? And where does technology fit within this mix?

Co-investment has also become more popular, and LPs are looking at different strategies to complement their portfolio as well as building relationships. Relationships are critical in both family dynamics and GP-LP relations, so some Family Offices are preferring direct investing and tailing new strategies before sharing best practices and other LPs. Ultimately however, as one panellist stated, ‘it is more about relationships than being able to go through the numbers and churn the numbers’ as they don’t have the resources that some big institutional investors have.

Meet our panel of family offices and hear what their strategies are on when it comes to approaching technology investments. Watch the session here.

#4: SPACs. SPACs. SPACs.

The thing that everyone is talking about: SPACs. As exits and different routes to public markets are changing, are these the best wat to exit today? Some see this as a great option while others are just not convinced, so our panel discussed how LPs and GPs can separate the hype from the reality.

With some LPs very concerned about potential misalignment of interests, there is no doubt that the SPAC conversation is going to continue into 2021, as dry powder and SPAC capital outstanding has left only around 10% having found a deal.

As we move into 2021 with this hot North American Technology market, our panel looks at the different ways LPs and GPs see real value-add opportunities and explore the role SPACs are going to play in the future. Watch the session here.

A honest conversation between a CEO and its VC

In addition to the key themes above, we also invited big names in the industry to show us where the opportunities in technology are and where the future of the industry will be heading.

Mark Suster, Managing Partner at Upfront Ventures led one of the most-watched sessions with Sarah Dorsett, CEO of Nanit, and gave us an honest conversation between a CEO and its VC as they talked about what they see as the future of North American Tech. Watch the session here.


Want to learn more about the North American market? Join us at SuperReturn North America Virtual, May 4-6, 2021, or find out more about other SuperReturn events here.

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