Al Is Transforming the Way Investors Value and Monitor Companies
By analyzing big datasets quickly and efficiently, Al is helping to speed up vital business processes for due diligence to benchmarking
Artificial intelligence (AI) is shaping key business processes in just about every industry, including alternatives. Jeff Stone, Managing Partner of Eurasian Capital LLC, a New York based Corporate Finance Advisory Firm, shares views on how alternative asset professionals as well as Issuers can capitalize on Al right now - and reasons this transformational technology willhave major influences on the investment “landscape industry" moving forward.
For both private equity firms and their portfolio companies, to issuers, accounting and auditing are vital business services. How is Al transforming the industry?
At a highlevel, Al flourishes in industries with significantly largeamounts of data and analytics. Given the value and dependence on high-quality data in the accounting, audit and investment industries, Al is a natural fit and one that will remain. Moreover, as technology continues to improve and evolve, it opensan enormous host of potential applications.
How can investors in alternatives benefit from Al?
Al has the ability to read large, complex documents and break them down into digestible bits of information/data, which is key for investors, fund managers as well as private/public Issuers.
Take partnership agreements as an example. Al can read the fund documents as well as pick out what the fund can and can't do (mandate driven) and deliver this information quickly and accurately. Due diligence is an expensive and time- consuming activity; AI has the ability to change that. Beyond obtaining the information needed quickly and accurately, a large part of Al processes is the machine learning aspect. The more these processes are used and worked on, the more accurate they become due to real-time learning that occurs.
How can Fund Managers/Issuers Capitalize on AI?
For fund managers, Al carries implications for duediligence and valuationsas well as creating benchmarks. By ingesting vast amount of data and applying learning, AI can provide accurate and timely valuations for portfolio companies and assets.
Should fund managers/Issuers be looking to adopt Al now, or wait for the technology to improve further?
As with any new technology there are pros and cons inregards to early adoption.
On one hand, Al is a strong differentiator in a crowded market. It can help you get ahead of your peers and appeal to investors. You'll also gain a better understanding of Al as it develops and becomes more powerful.
How is Eurasian Capital, LLC working with Al to serve clients?
We began working with AI a couple years ago and realized that Al has the Ability to automate and improve several areas within the areas of accounting and auditing, speeding up multiple processes and leaving our small team with more time to spend on higher-value work product.
Consider auditing. Machine learning can analyze and process a large number of contracts much faster than current manual processes involved in day-to- day auditing - saving time, money and resources. That's the technology that Smart Auditing is built on.
We set about creating our Smart processes by partnering with various vendors and have developed several modules that have increased efficiency in the audit process. We've created verticals for revenue recognition and employee benefits amongst overall utilities.
“ECAP”has made the investment in time/capital and processes to get Al processes up and running. We've built out Al capability so that our clients and employees don't have to start from scratch.
Al will get better and better as more informationis dumped into these systems; whereby,more value will becreated. Fortunately, we work in a data-rich industry, so investment processes are prime for Al disruption.
Investors will be able to gain granular, intelligent information on large portfolios with accurate benchmarking all through an Al solution. The way we value and monitor assets, companies and portfolios will be significantly more advanced in few years' time.While some aspects of theseprocesses can be done in programs Like Excel, Al provides accuracy and the ability to learn and constantly improve its own processes.That's where the value is. You can't teach a spreadsheet.
Entailing over 35 yrs. of buy-side/sell-side experience in the capital markets and working with closely held companies, Jeff Stone, Managing Partner, Eurasian Capital, LLC.,is responsible for identifying emerging opportunities and strategies for existing markets and segments, thereof.
Eurasian Capital, LLC.