Over the course of the last few months, we have been sitting down with some of the leading figures in alternative asset management software to get their outlook on current and future industry hotspots, to discover what they find to be driving product sales and development, and to obtain their overall view of the market – where the benefits of their products are able to gain them a competitive advantage, and their advice for firms looking to invest in a new system….
Olivier Dellenbach has been CEO of eFront since founding the company in 1999. With extensive experience in risk management and alternative investment, Olivier has lead the strategic direction of the company and its software solutions, ensuring that innovation remains its core value. Before founding eFront, Olivier co-founded NAT Systèmes in 1987 and became its chairman in 1989; NAT Systèmes was sold to Canadian group Cognicase in 1998. Olivier is a graduate of the highly regarded French university École Polytechnique.
What is your outlook for expansion, sales, people and clients? What are the perceived hotspots (e.g.geography,sector)?
In the 18 months since acquiring AnalytX, we have grown the headcount in our Belgrade office from 60 to 250 – we are now 650 people in total – and are growing the development team there at four times the rate we are in Paris. We now have 900 clients worldwide and are looking at adding another 100+ a year going forward.
In terms of directional growth, we are looking to add to the 250 LP clients already using the eFront platform. We believe that is a vastly underserviced area of the market and see a great opportunity there. We made great strides in the US last year – signing with both LPs and fund administrators – and see no reason that shouldn’t continue. The extra investment from our recent acquisition will only serve to drive that; the intention is to treble our footprint globally in the next 3–4 years.
Product-wise, we’ve noticed a very definite pattern in firms’ drivers for system selection: right now FrontInvest is a good strategic and technical fit for debt providers and fund of fund managers. FrontGP lends better to the European managers where perhaps, with respect, the requirements and thus the install might be less complex. That said, we also look at the VC market in California and see a great opportunity there for FrontGP. Part of the challenge of course will be the number of smaller firms in that marketplace – the requirement for example that management company information be tracked in a system where a product like QuickBooks is currently the solution of choice. Still, we have our Product Manager Harpreet, who knows FrontGP inside out, relocating to California to lead the push, and have great confidence in the adaptability of our product.
One of the real benefits to FrontGP is the relative ease with which it can be deployed. This is definitely something which has led us to consider our own in-house professional and project services offer, and whether we might be better placed to leverage the implementation and process management expertise of a third-party consultant to handle delivery. We have a partnership programed in the pipeline right now.
What trends are you seeing in potential clients’ interest in your product (e.g. investor, regulatory)?
Mobility is key: the ability to access and consume data on mobile devices is increasingly preferred to dashboard summaries.
Data management continues to be a big challenge for LPs, so ease of reporting was the obvious driver behind our investment in the eFront LP Investor Portal (EIP) and FrontESG products; these are AltExchange-compatible and provide pre-calculated figures, ensuring that the data provided is standardized and ready to use. This allows partners to easily build reports themselves, which in turn simplifies the process overall – thereby reducing costs and ultimately reducing reliance on eFront.
One trend we’re particularly seeing is a move towards cloud-based solutions. Five years ago, clients were primarily buying our software to install on their own servers. Despite the associated costs of an IT team, server hardware and licenses, not to mention longer lead times, PE firms were reluctant to transition to the cloud owing to concerns about privacy and security.
Now however cloud hosting is commonplace – and in fact widely expected. Some vendors no longer even offer non-cloud options. So our clients are much more open to the obvious advantages in terms of speed of deployment, and reduced overall costs (even with a rental or hosting fee) that cloud-based solutions can offer them.
How do you view the future of the industry and where does your product fit in?
The ability to seamlessly integrate systems is critical for firms the more they look to best-of-breed applications to support specific business functions. We’ll be looking to enhance our own platforms’ capabilities to fit that model, although our aim is to encapsulate that in a single product. Data warehousing and access to information for investors and managers is also something we recognize as a growth area and something we’re pushing with eFront Portals.
In the current economic climate there is much more interest and concern surrounding transparency and access to data – e.g. which assets are being bought, how the value of those assets is being calculated etc. The idea that more information should be available is out there, so people are increasingly wanting it.
We are aware of this demand and believe that PE investors should have access to this information. The difficulty is that most of it has been accumulated in disparate legacy systems over the last 10 or so years. What our product suite does is provide the ability to consolidate and aggregate this data by effectively transforming it into a standardized, common language.
What features have you introduced recently and what features are to come?
We launched the AltExchange platform as a means to get GPs to standardize their data; it doesn’t really matter how they do things internally, but when they’re sharing information with investors, it needs to be easy to consume, but also in a consistent, commensurable format.
In that it combines our technology with data collection and delivery sources, eFront Portals will help drive eFront’s transition from pure software vendor to fully-fledged service provider.
EIP provides a range of standardized and bespoke templates that GPs can use to provide quarterly reports to LPs, enabling more reliable and faster data processing. But the process of collecting that data can be time-consuming, especially with the relatively limited resources many LPs have at their disposal. So with eFront Portals, eFront takes responsibility for the data gathering itself, populating our templates so that LPs can focus their efforts on analysis.
The solutions we offer are highly modular too, so barriers to entry are low and our products can easily be scaled up as requirements develop. Clients can effectively shift their business to using our data formats and move on.
What benefits do your clients most often see from implementing your product?
The real benefit comes when data is readily accessible and usable – and our clients can get good information from it. Those using eFront Portals in particular are seeing reduced time spent on consolidating and inputting data and more time spent on strategic analysis.
What are most requested new features and/or functionality?
Again, mobility is topping the list. In today’s world, mobile compatibility, support and access are expected, especially by the younger generation. The ability to access data anytime, anywhere and on any platform is crucial. Not a huge amount of work has gone into this from the industry as a whole, but we’ve been developing this kind of technology for some time, and many of these developments are now coming to fruition. This is a huge value-add across the eFront suite of products.
What forum/s do you currently have to obtain feedback from your clients?
We have client conferences every year where we present our latest developments to clients, but this also gives them the opportunity to feed back directly to us. We also have a highly active, round-the-clock helpdesk, through which we’re continually receiving client feedback. Our account manager works closely with our client base to ensure R&D is constantly being tailored to their requirements.
How do you differentiate your product from others when speaking to potential new clients?
The strength of our R&D is a real point of difference for eFront, with large and rapidly growing teams in Paris and Belgrade committed to delivering new features. Our development pipelines are shaped by the requirements of a large and diverse global client base, which spans geographies, large and small companies, GPs and LPs. R&D is a large percentage of our budget and we can draw on a wealth of PE experience to drive that forwards.
What advice would you give a C-Level customer thinking about purchasing software or embarking on an implementation project?
Choose wisely: you have to live with your chosen partner for 10 years or more. Also, every software company or service provider is up for sale, so be aware of this and make sure you understand the implications.
Be clear on what you are looking for and how you are going to measure ROI – where is the value? This is not something typically done on a PE firm’s software project. Ultimately knowledge/value is linked to data, so data needs not only to be captured but also to be accessible (reports/mobile devices etc.).
Think about streamlining systems and processes: go for simple not complex. Focus on features as the basis for differentiating between vendors and solutions.