Welcome back to the Alt Goes Mainstream podcast.
Today’s episode is with a founder who is building mission-critical valuation and portfolio monitoring software for alternative asset managers.
We are joined by
Yann Magnan, the Co-Founder and CEO of
73 Strings, to discuss how valuation work and portfolio monitoring is moving from manual to automated and why that’s so important for the industry. 73 Strings has leveraged AI and automation to more seamlessly and cost-effectively extract data, monitor portfolios, and streamline middle-office processes for valuations. 73 Strings works with a number of the industry’s top alternative asset managers and has received investment from Blackstone, Fidelity International Strategic Ventures, and Broadhaven Ventures, amongst others.
Yann has brought his experience as a senior member of the Duff & Phelps team, where he was EMEA Market Leader and member of the Global Operating Committee and as a Partner at EY’s Transaction Advisory Services to help bring valuation and portfolio monitoring solutions into the mainstream.
Yann and I had a fascinating conversation about how technology innovation is impacting private markets. We discussed:
- The challenges with manual valuation services businesses.
- How to create uniformity and standardization with private markets fund performance data.
- How AI is changing private markets post-investment reporting processes.
- Does automation in private markets help big funds or small funds more?
- The evolution of post-investment private markets market structure.
- The biggest technology innovation still missing from private markets.
- Why the growth of the wealth channel and evergreen funds increases the need for more streamlined reporting and valuation solutions.
Thanks Yann for coming on the show to share your views and wisdom on private markets.
A word from AGM podcast sponsor, Ultimus Fund Solutions
This episode of Alt Goes Mainstream is brought to you by
Ultimus Fund Solutions, a leading full-service fund administrator for asset managers in private and public markets. As private markets continue to move into the mainstream, the industry requires infrastructure solutions that help funds and investors keep pace. In an increasingly sophisticated financial marketplace, investment managers must navigate a growing array of challenges: elaborate fund structures, specialized strategies, evolving compliance requirements, a growing need for sophisticated reporting, and intensifying demands for transparency.
To assist with these challenging opportunities, more and more fund sponsors and asset managers are turning to Ultimus, a leading service provider that blends high tech and high touch in unique and customized fund administration and middle office solutions for a diverse and growing universe of over 450 clients and 1,800 funds, representing $500 billion assets under administration, all handled by a team of over 1,000 professionals. Ultimus offers a wide range of capabilities across registered funds, private funds and public plans, as well as outsourced middle office services. Delivering operational excellence, Ultimus helps firms manage the ever-changing regulatory environment while meeting the needs of their institutional and retail investors. Ultimus provides comprehensive operational support and fund governance services to help managers successfully launch retail alternative products.
We thank Ultimus for their support of alts going mainstream.
Show Notes00:00 Introduction and Sponsor Message
01:56 Welcome to Alt Goes Mainstream
02:05 Introducing Yann Magnan and 73 Strings
03:56 Yann's Background in Valuation Services
04:33 The Inefficiencies of Manual Valuation
05:20 The Genesis of 73 Strings
06:11 The Importance of Experience in Private Markets
06:24 Automating Valuation Processes
08:32 Challenges in Standardizing Valuation
09:13 The Role of Human Judgment in Valuation
10:24 AI's Potential in Valuation
11:10 Accountability in Automated Valuation
12:47 73 Strings' Data Handling and Partnerships
14:07 Standardizing Data Across Portfolios
15:44 Impact of Automation on Human Processes
17:02 Growth of the Wealth Channel and Evergreen Funds
17:59 Accelerating Need for Better Valuation Software
19:37 Challenges of High-Frequency Reporting
19:59 Technological Implications of Daily Valuation
20:31 Private Assets and Technology Infrastructure
20:44 Industry Resilience and Smart People
20:59 Forefront Firms and Blackstone Partnership
21:48 Valuation Process and Data Control
23:11 Extensibility to Other Asset Classes
24:12 73 Strings' Versatile Platform
25:13 Howard Marks on Asset Allocation
25:52 Atomic Unit of Value in Valuations
27:31 Data Sharing Across Business Units
30:24 Automation Benefits for Large and Small Firms
31:33 Building Technology for Large Firms
34:16 Trust and Experience in Client Relationships
35:09 Strategic Investors and Their Value
37:37 Industry Participation and Standardization
39:13 Maturity and Cost of Technology
40:22 Future of Data in Private Markets
41:39 Convergence of Private and Public Markets
42:11 Volatility and Transparency in Private Markets
43:14 Attracting Retail Investors
44:41 Conclusion and Final Thought