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Trend Report: Private Equities Shift Focus to the Future with ESG Investing

By Jill Harrison 09.15.20
This is the final part in a series that addresses the technology trends the Private Equity industry is facing. Curious to read more? Here are parts one, two, three, and four  from the head of our Capital Markets practice.

Beyond the core opportunities that technology presents for productivity, integration, and growth within our Private Equity portfolio, there are a number of trends we are watching to help the industry realize progress at large. Many of the firms we work with have quickly been expanding their Environmental, Social & Governance (ESG) strategies to invest in companies that are helping to tackle climate change, to pay closer attention to corporate governance within their portfolios, and to make progress towards more diverse and inclusive practices — all long-held values of the tech community, and all urgent given the current social and political climate. 

Sustainability and ESG investing

What does this mean for downstream technology programs? For these ESG investment strategies to come to fruition, forward-thinking firms are incorporating additional niche data resources in order to source deals in increasingly global markets. The data ecosystem is experiencing a rapid proliferation and dealmakers need deeper access to actionable data about innovative companies in emerging markets. These data sources become integral to sourcing and monitoring potential future investment, and as such, they become part of the greater data vision and roadmap. 

In addition, many firms are updating their fundraising and pipeline management tools to support the tracking of this new investment strategy so that management can keep close tabs on the deployment and performance of these ESG investment funds. Firms investing in these strategies are also more likely to leverage these key performance metrics in their marketing programs to promote firm reputation and drive social engagement. Over the last several years, Silverline has begun to implement Salesforce’s powerful suite of marketing automation and social advertising tools to drive strategic multi-channel campaigns for firms looking to evangelize impact.

In addition to support for dedicated ESG investment strategies, one of the most exciting developments for us at Silverline has been watching powerful investors like CalPERS shift the conversation about investment policies towards diverse, inclusive leadership that outperforms the market. For many years, Silverline has made a strong commitment to Diversity, Inclusion & Belonging, and we are excited to help Private Equity leaders address their own unique challenges. 

Again, the initial solution to this challenge manifests through a thoughtful evaluation of a firm’s data strategy. We have begun advising clients on data providers they can leverage to understand the current state of representation in a firm’s leadership and board of directors, and how to power more diverse and equitable executive search practices for their portfolios. Silverline has been establishing partnerships with firms like Equilar to create high-tech, data-driven ESG solutions so that private equities can lay a strong data foundation in advance of anticipated diversity legislation. Our goal is to help our private equity clients power greater performance through technology in all aspects of the business.

Where does that leave us?

As we reflect on our work partnering with Private Equity clients to develop their digital transformation roadmaps, we are encouraged by all the ways that firms are investing in developing their technology capabilities. As firms look to build their analytics and data science capabilities in order to better monitor and interrogate their portfolios, Silverline takes its role as expert service provider very seriously. It is our goal to provide industry insights and expertise in emerging technical domains, and pragmatic recommendations on how to realize fast results. 

The long-term client relationships we most cherish are rooted in the practice of collaboration, which helps us to imagine and execute new ideas for technology that drive advantage for dealmakers and investors.

If your Private Equity firm needs help with operational strategy, planning for your portfolio integration initiatives, or building your data and security roadmap, Silverline is here to help. Our team of experts are ready to build value for your organization and would be glad to have a discussion about where your firm currently stands. No matter where you are in your Salesforce journey, we can help you find your way forward.

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