A sneak peek: What’s behind the private markets’ digital transformation?

April 4, 2023
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Legal technology isn’t brand new, but it also isn’t old hat yet. Instead, many industries, including financial services, remain in the midst of information-gathering and adoption. This testing-the-waters phase is both challenging and compelling as the diversity within financial services calls for a wide range of technology solutions. There’s no one-size-fits-all tech stack.

Given this variety, the drivers behind legal tech adoption impact asset managers, investment banks, and other businesses differently. What’s pivotal for one firm – say, cutting costs – might not concern another.

Yet we can pinpoint commonalities among firms and contemplate the future of legal tech within financial services.

In our latest guide, What’s Behind the Private Markets’ Digital Transformation, we review the factors driving tech adoption, consider what’s next for legal tech in 2023, and discuss how Ontra’s legal operating system is becoming a fundamental solution for firms.

What's Behind the Private Markets' Digital Transformation

Legal tech drivers

We took an in-depth look at what’s driving legal tech adoption in the investment management space. Here’s a glimpse into some of the factors we discuss in the guide:

Using Big Data and analytics

Despite understanding how influential Big Data can be, asset managers still grapple with how to tackle the sheer volume of data available to them. Most are still developing the technology infrastructure they need to gather and analyze data.

“We use a ton of technology in the deal process itself,” Jon Korngold, global co-head of technology investing and head of growth at Blackstone, told Ontra. “We’re dealing with magnitudes of data that can no longer be credibly processed by humans. [Asset managers] need to have some data science capability to be able to distill signal from an increasing amount of noise.”

Making faster, data-driven decisions

Managers face fierce competition for assets, which necessitates identifying and evaluating targets faster than other firms. Real-time data and data-driven insights will become critical to reaching the best deals.

Increasing value for GPs & LPs

After the last few years, it’s difficult to predict what the U.S. and global economies will do in 2023. No matter the potential challenges to come, it’s clear managers are focused on generating value for themselves and their investors. How they create value for their LPs will vary, but it’s likely their strategies will involve implementing advanced technologies.

Enhancing reporting capabilities

More and more investors are demanding access to high-quality information. In some cases, this is driven by investors’ own regulatory requirements. In other cases, investors are interested in environmental, social, and governance factors. Whatever the motivation, managers that have the technology infrastructure to provide more information and real-time data will have a competitive advantage.

Incorporating ESG

It’s impossible to discuss legal tech within investment management without mentioning ESG. While not every manager will choose to incorporate ESG into their decision-making or create ESG-specific funds, no firm can ignore it. Firms that want to incorporate ESG will need technology to gather and report on relevant data as well as a solution to prove their compliance with their ESG-related promises.

The firm of the future

A digital transformation is well underway in the investment management industry, but firms have a long way to go. Right now, many asset managers still rely on manual and inefficient processes where technology can automate, outsource, and optimize. Transitioning into a firm of the future requires asset managers to review the technology available to them and adopt the tech stack most likely to help them achieve their goals.

Ontra offers a legal operating system that addresses several manual processes throughout the fund lifecycle, from investor onboarding to high-volume routine contracts and obligation management. Ontra has become an integral part of asset managers’ tech stack.

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