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Your success as a private equity investor depends on your ability to develop and maintain strong relationships.
You may increase your transaction flow and maximize the value you provide to your firm’s portfolio businesses by cultivating deeper connections with C-level executives, bankers, fund managers, venture capital firms, etc.
But relationships need to be cultivated, monitored, and followed up on; they don’t just emerge naturally. Your company requires a customer relationship management (CRM) platform developed specifically to meet the objectives of a private equity business in order to manage and maximize the value of your connection network.
Instead of implementing scalable IT solutions created specifically for PE companies, the majority of private equity firms still rely on antiquated technologies like Excel spreadsheets and generic contact management programs.
In order to speed up the deal-making process and remove manual data entry and other time-consuming tasks, your CRM system should act as your company’s data management, deal sourcing, and pipeline management system. This will free up your and your team’s time to focus on developing lasting relationships and closing deals.
It might be difficult to navigate the private equity CRM industry because there are so many companies offering comparable functionality.
The most prevalent CRMs utilized by private equity companies in 2023 will be discussed in this article. You will have a better understanding of the features and capabilities you need to consider when choosing CRM software for your business from doing so.
1. DealCloud
A legacy CRM system built for the capital markets is called DealCloud. DealCloud is used as a CRM by private equity, hedge funds, real estate investors, and other financial services companies across asset classes to manage business development, track transaction flow, manage portfolios, and manage investor relationships.
You must set aside time to manually maintain data clean & organized and make sure your team consistently enters contact, interaction, and deal data directly into the DealCloud system, similar to other CRMs lacking relationship intelligence. However, contemporary private equity CRMs with relationship intelligence automatically construct and expand profiles with information from other sources, saving your staff hundreds of hours annually.
Due to its magnitude, DealCloud deployment can be costly and time-consuming and involves some human labor and data uploads. DealCloud’s ability to be tailored to your company’s needs is a huge benefit, but this customization may result in costly installations taking up to six months. Once the system is set up, the DealCloud team must handle the majority of modifications and adjustments, which adds to the cost and complexity.
Pros
- Built specifically for private equity, this design makes sure that all of its features are in line with the demands of the sector.
- The platform may be greatly customized so that businesses can make it meet their own needs.
Cons
- Learning Curve: Due to its extensive toolkit, there is a significant learning curve for new users.
- Integration difficulties: Additional development effort is needed to set up integrations with particular third-party solutions.
- User Interface: Some users find the UI/UX to be archaic and difficult to use.
If you want a more contemporary and adaptable CRM platform that can be swiftly launched without requiring pricey modification work or continuing expert services, a different supplier could be appropriate for your business.
2. Altvia
For alternative investment businesses, Altvia is a web-based CRM that runs on top of Salesforce.
PE firms and other alternative investment groups rely on Altvia to manage LPs and investor relations, track transaction flow, monitor portfolio businesses, and follow their fundraising process.
Due to its lack of relationship intelligence and reliance on manual data entry over automation and enrichment, Altvia’s CRM functionality is comparable to that of other conventional CRMs.
By using configurable checklists for various phases of the review process, the Altvia CRM enables businesses to manage their transaction pipeline and expedite due diligence. To track deals, deal flow sources, value trends, and other forms of analyses, users of Altvia may develop customized reports and dashboards.
Sadly, Altvia is not a CRM for relationship intelligence. It is unable to do a relationship network analysis of your company to find new business prospects or provide you with instantaneous network warnings. You’ll need to seek elsewhere if you want to discover your network’s potential.
Pros
- Design for a particular industry: Configured for the private equity and alternative investment industries.
- Dedicated Support: The support staff at Altvia is familiar with the difficulties that private equity businesses encounter.
- Strong Data Analytics: Altvia provides businesses with effective solutions for gaining actionable insights and making data-driven choices.
Cons
- Learning Curve: There may be a learning curve for new users, particularly those who are not familiar with Salesforce.
- Lack of Integration with Other Tools: Third-party tool integration options are restricted or need more customization.
- Cost: Altvia’s pricing may be too expensive for some businesses.
3. Salesforce
The biggest and most well-known CRM platform is Salesforce.com. Companies of all sizes and sectors depend on Salesforce for their CRM and other software needs since they are the pioneers of cloud-based CRM.
Salesforce is a transactional CRM made for sales teams to move prospects along a sales funnel, which is unfortunate for PE companies.
Most private equity companies perceive Salesforce to be overly difficult for their purposes because of its size and breadth. Additionally, you would pay for features like marketing automation and customer support that you do not require. As a result, if you suggest that your team utilize Salesforce as their private equity CRM software, you could get some resistance from them.
Salesforce requires considerable and pricey customization from a third-party Salesforce partner or consultant in order to be used as a private equity CRM. When compared to out-of-the-box solutions, the majority of customization work would need to be supplemented by a tailored training program, adding to the cost and lengthening the deployment process.
You will also need to budget for any further improvements or adjustments that will be required after the first setup is finished when working with a Salesforce specialist to personalize the system.
In comparison to other “out of the box” private equity CRMs, utilizing Salesforce may make sense if your company has a team devoted to administering and customizing your Salesforce CRM. Numerous connections in the Salesforce AppExchange, the most popular CRM, let you connect to various components of your IT stack.
Salesforce still requires manual data input, similar to the other CRMs on this list, which means your team will spend more time on administrative tasks and less time cultivating connections and finding new business prospects. If your company utilizes Salesforce and wants to stick with it, 4Degrees can integrate with it to help you identify new chances and get rid of data input by energizing your relationship network.
Pros
- Highly Customizable: Salesforce is renowned for its flexibility to be tailored to any company’s specific operational needs.
- Integration Capabilities: A simplified workflow is made possible by Salesforce’s ability to interface with a variety of other applications and data sources.
- Scalability: Salesforce scales its functions to accommodate both small and large businesses.
Cons
- Expertise is Needed for Customization: Expensive technical know-how may be required for setting up intricate integrations or making big adjustments.
- Lack of Expert Support: The Salesforce support team is not knowledgeable about private equity or the typical difficulties PE firms encounter.
- Steep Learning Curve: To effectively utilize its powers, users must undergo extensive training.
4. Affinity
Affinity is a deal management and CRM software designed for deal-driven businesses to automate data entry, manage relationships, and monitor deal flow. Affinity gives teams a better knowledge of their network to find new connections and business opportunities using proprietary technologies.
Affinity asserts that by seamlessly integrating with Gmail and Outlook and converting email content into contact and deal profiles, it may save investors hundreds of hours per year that would otherwise be spent on human data input.
Affinity is a good tool, but it falls short in giving users news and updates on their networks, making it difficult for investors to keep in touch with their contacts and forge deeper ties.
Unfortunately, Affinity lacks comprehensive user control over how users’ data is shared and has a reputation for being extremely lenient with your company’s data.
Pros
- Automated data capture: By eliminating human entry and increasing accuracy, data may be captured automatically.
- Customizable: Provides some degree of flexibility, making it possible to meet the unique requirements of various businesses and teams.
Cons
- Learning Curve: Although designed to be user-friendly, CRM platforms may provide a learning curve to people who are new to them.
- Integration restrictions: Although it supports integrations, not all third-party solutions may integrate with it effortlessly, necessitating the use of extra tools.
- Pricing: Smaller teams may find it prohibitive since it is expensive in comparison to similar alternatives.
5. Dynamo
Private equity, investment banking, and other investment management businesses handle contacts and investor interactions using the highly customisable Dynamo alternative asset management end-to-end platform. Since Dynamo does not specialize in CRM, its CRM features are integrated within a larger feature set that also includes back-office applications.
Dynamo may be a laborious tool with extra capabilities that organizations might not require for PE firms seeking for a CRM to manage their deals and leverage their relationships. Dynamo, like other private equity CRM platforms, depends on human data input to keep relationships and activities current.
Dynamo interfaces with certain common SaaS products used by PE companies as a comprehensive end-to-end platform, however possibilities are restricted in comparison to other more contemporary Private Equity CRMs.
If you require the back office capabilities but are seeking for a PE CRM system, go elsewhere.
Pros
- Holistic Solution: Dynamo provides a complete set of capabilities, from investor communications to transaction monitoring, obviating the need for various software solutions.
- Customizability: Provides opportunities for modification, allowing businesses to modify the platform to meet their own operating needs.
- Dedicated help: Provides thorough help, guaranteeing consumers can handle any difficulties swiftly.
Cons
- Not Specialized: Dynamo does not have the most sophisticated CRM features due to its numerous use cases.
- upgrades and Changes: As with many platforms, users must retrain themselves on some capabilities as a result of periodic upgrades.
- Pricing: Dynamo might be expensive given its extensive feature set.
6. eFront
The features that eFront offers are specially crafted to meet the specific needs of the alternative investment sector. Every aspect of alternative investing is covered by eFront, from thorough portfolio management and rigorous risk assessment tools to transparent investor reporting, extensive data analytics, and seamless integration possibilities.
After being acquired by BlackRock in 2019, eFront has strengthened its position in the industry by utilizing the resources and experience of its parent business to meet the changing demands of its customers.
7. 4Degrees
A relationship intelligence CRM tool called 4Degrees was created by ex-investors specifically for businesses in the private markets.
With 4Degrees’ comprehensive CRM, your team may view your deal pipeline as a list or in a Kanban-style grid, keeping you informed of the progress of each offer. By syncing with Microsoft Exchange and Gmail to automatically record all your interactions and augment contact information with high-quality data sources like Pitchbook, 4Degrees acts as your company’s single source of truth, ensuring that everyone on your team is aware of the situation.
The 4Degrees platform also enables businesses to outperform their competition by doing away with manual data input and connecting with your company’s current workflows to automate other time-consuming tasks.
4Degrees has a reporting and analytics engine that gives real-time snapshots of important metrics, including connections, fundraising, and deal progress—giving you access to the data you need to make the best decisions. This engine allows you to instantly surface insights and delve into data.
With the platform’s connection intelligence capabilities, your team can quickly find warm introductions and the best route to a firm, expert, or investor by analyzing the strength of your team’s relationship networks.
4Degrees offers alerts that let you know when people in your network have made investments, moved professions, or done anything else that might help you remain up to date-with your network, cultivate connections, and find new possibilities.
In order to guarantee that you never lose connection to your network, 4Degrees offers a mobile app for iOS and Android smartphones.
A more thorough comparison of 4Degrees and other popular CRMs used by private equity teams can be found on the pages below.
Various CRMs
The top CRM systems used by private equity companies were examined in this guide. Other popular platforms used by private equity companies are Microsoft Dynamics, which is made for businesses that rely on other Microsoft corporate programs, and Hubspot, which focuses on inbound marketing and marketing automation.
By implementing a CRM that was not created for private equity professionals, you run the risk of having to spend a lot of time and money educating their implementation teams on your unique use cases since they are unfamiliar with the private equity sector. On the other hand, your organization will begin benefiting from your CRM a lot more quickly if you collaborate with a group of ex-investors who get the PE business model and use cases.
How to Choose the Best CRM for Private Equity
You need a CRM supported by a staff that is aware of your specific requirements if you work in a field where connections are your most significant assets. It makes no sense for your private equity business to use time and resources trying to force-fit and adapt a CRM software created for a transactional sales process.
You should ask for a customized trial of 4Degrees, the only Relationship Intelligence CRM created for investors by ex-investors, if you want to use your company’s most important asset to locate and complete more proprietary transactions while automating time-consuming tasks like data entry.