Top Technology Trends Q&A with Griff Norville
The private markets have grown tremendously over the last 50 years in terms of size and complexity. Having access to comprehensive, high-quality and timely data – and then knowing what to do with it – gives private market investors a competitive advantage. Investors know that intuition is no longer going to cut it, which has ultimately created demand for cutting-edge tools and solutions.
We caught up with Head of Technology Solutions Griff Norville to discuss the latest wave of digital transformation spanning the private markets and how we deliver value to our clients through tech-enabled solutions.
Q: We are experiencing an era of unprecedented technological advancement. Why are private market investors still grappling with modernizing their tools and technology?
A: It’s an exciting time to be a private markets investor, now with access to more industry data and purpose-built technology than ever before. Yet, there are plenty of investors stuck in the “Excel Age,” a time when fragmented, complex and cumbersome processes were the norm for this asset class. Isn't it about time we catch up with our public market peers? This isn’t a novel revelation. Innovation is an integral part of how Hamilton Lane has approached the private sector for more than 30 years. I’ve said it before, and it’s worth saying again, we believe that investors that utilize best-in-class technology, combined with the most timely and in-depth private markets data, will be best positioned to win.
Q: What are some general pointers you may have for investors looking to leave the ‘Excel Age’ and update their investment toolkit?
A: Think holistically about your investment goals and technology ecosystem. We dedicate a significant amount of our time ensuring that we're strategically leveraging technology to be the best investors and partners to our clients. On the investment side, we're using technology to digitize our diligence process, specifically how we interact with and collect data from general partners (GPs). Increasingly, we’ve been focused on giving our clients access to the same information that our global investment team leverages when reviewing opportunities across the asset class. For instance, our Fund Investment Team evaluated over 1,100 new funds globally in 2022 (as of December 31, 2022). That data was then funneled into Cobalt LPTM, our proprietary analytics, forecasting and diligence platform for institutional investors in order for clients to incorporate the “Hamilton Lane point of view” within the framework of their portfolio and investment strategy.
Q: Can you expand on other ways that investors can leverage technology to navigate some of the challenges associated with portfolio management in this asset class?
A: Sure, I’ll stick with Hamilton Lane as the example. It’s common knowledge that complexities around information management and reporting in this asset class make it difficult to capture an accurate snapshot of one’s portfolio. We use technology that integrates machine learning to extract unstructured data from GP documentation as part of our data management service for LPs. That’s just step one. Next, we use databases and portfolio monitoring solutions to organize that data and track portfolio performance. Now that our clients have all of this great data at their fingertips, how do they decide what to do next? Well, they can leverage our proprietary cash flow projection model, scenario/what-if analysis and commitment plan solver in Cobalt LP.
Q: Why has the industry historically been slow to adopt technology and how do you see this relationship evolving?
A: This is partially due to an older style of investing – think Excel, email and word-of-mouth interactions. However, the world of data that we live in now cannot be processed and applied effectively within this framework. I wish it was as easy as there's just one solution to do it all, but we have instead favored a best-of-breed approach tying systems together. We've invested a lot in our internal teams, linking processes and data flows to gain consistency across systems and ensuring consistency across applications. For example, Cobalt LP was initially designed to be a pre-commitment and diligence tool, but it has continued to evolve into a comprehensive, end-to-end portfolio reporting platform as well.
Q: It would be remiss not to mention artificial intelligence. Can you shed some light on how Hamilton Lane is thinking about this area?
A: We have an exciting initiative called Hamilton Lane Innovations. Essentially, we invest in relatively early-stage private markets technology companies in an effort to make a meaningful impact on this industry. Our north star, if you will, is to create a best-in-class technology ecosystem for not only ourselves, but our clients. For example, we’ve been working to develop software aimed at private wealth investors. In partnering with Helix BY HL, we have the opportunity to explore a generative AI chatbot interface. It's early days, but we are excited to see where it goes.
Interested in seeing Hamilton Lane’s data and technology in action? Learn more about our Technology Solutions or contact us to schedule a demo of Cobalt LP, our proprietary analytics, forecasting and diligence platform.
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As of December 15, 2023