Placement agents turn to technology to enhance their services
Insights

Placement agents turn to technology to enhance their services

13th March 2023

The role of a placement agent is critical in helping private markets fund managers (GPs) raise capital from investors (LPs), enabling them to execute their investment strategies and deliver returns.

Within this process, a placement agent assists in identifying potential investors, marketing the fund, and facilitating fundraising. They typically have extensive networks of contacts within the investor community and a deep understanding of the fundraising process.

Why GPs work with placement agents

According to PitchBook, 12.5% of funds that closed in Q4 2022 used a placement agent to aid in their fundraising. 

Working with a placement agent can provide GPs with a range of benefits, including access to a wider network of investors, specialised expertise in fundraising, help navigating complex regulatory requirements, and enhanced credibility with investors.

However, many see the main benefit of using a placement agent as shortening the fundraising timeline. Until recently, a fund working with a placement agent would spend less time in market than one without. However, since 2020 this trend has reversed, with funds working with placement agents spending more time in market on average. 

So why has this happened? It can be assumed that the pandemic helped to level the playing field as LPs have become more comfortable with online due diligence processes. This means that placement agents need to drive efficiencies internally, and demonstrate their value to GPs in other ways.

Why placement agents are turning to technology

To address this trend, placement agents are increasingly looking to digitise their processes and demonstrate greater efficiency. As a result, many are investing in technology as the key operational change that will drive these improvements. 

Digital tools like Delio Core will enhance the role that placement agents play by enabling them to:

Create a smoother LP onboarding process

LP onboarding can be complex. From investor categorisation and preferences, to the challenge of getting your network to engage with deals, it can be a time consuming and arduous task.

Technology is streamlining this through process automation, embedded governance checks, and the generation of data-led insights into LP activity that have previously remained unseen.

Classifications, preferences and deal interactions are all captured within the platform, meaning that future communications can be automatically filtered, easing the reliance on multiple spreadsheets and disparate systems while also reducing the risk of human error. 

Distribute deals more effectively

A private markets platform like Delio Core allows placement agents to promote their deals to investors quickly, efficiently and compliantly. Workflow automation, investor targeting tools, and real-time analytics all help to save time and effort when distributing deals. 

Deals can be presented professionally and elegantly through a white-labelled platform that acts as an extension of the placement agent’s brand. At the same time, LPs are able to take proactive first steps by accessing deals 24/7, with tailored content to explain each deal and drive engagement.

Platform analytics indicate when LPs are active on platform and what deals they’re engaging with. This helps placement agents to provide GPs with data-led insights regarding which deals are driving interest and also helps to drive more proactive and targeted conversations about investment opportunities.

Stay on top of regulatory compliance

By implementing a technology-led approach, regulatory compliance can become an embedded part of your processes, rather than an additional task that needs to be completed separately.

A ‘compliant by design’ process includes compulsory compliance checks that generates a full audit of all tasks and activity conducted via the platform, creating complete peace of mind from a regulatory perspective. Automated, centralised document access also means that only those who are granted access can see documents, allowing the placement agent to retain complete control of which information is released and when.

How Delio supports placement agents

Delio is working with placement agents of all sizes to digitise and streamline their processes. For example, boutique placement agent TritonLake uses Delio Core to create a secure and controlled digital environment from which funds and direct deals can be filtered, distributed and reviewed.

Within their platform, they have digitised their investor onboarding process, automated tasks wherever possible, and track all activity to form a comprehensive audit trail. Their network now enjoys seamless digital access to investment opportunities at their convenience and can explore deals quickly and efficiently. 

Conor Smyth, Founder and CEO of TritonLake comments; “the feedback we have received to date has all been extremely positive, and we believe that Delio’s solution is adding, and will add, real value to our relationships and interactions.” 

Find out more in their case study.

In conclusion…

It’s clear that working manually isn’t a scalable, long-term solution as more LPs get comfortable with due diligence processes. With placement agents under increased pressure to demonstrate how they are adding value to GPs, technology will play a key role in demonstrating the speed and efficiency of their services. This approach should ultimately help them raise more capital, without having to hire more people.

You can find out more about Delio Core’s functionality and ability to power sustainable growth, improved efficiency and an enhanced client experience by booking a demo today.

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