As stakeholders’ demands grow and investment cycles get more sophisticated, your investment management system should account for the new challenges. For better or worse, Excel spreadsheets will serve you no help in this battle. However, private equity CRM software will.
The question is – which CRM can be rightfully called the best CRM for private equity?
With 26 years of experience in the CRM market, we took time to get smart about the unique technology needs of capital markets and can share our expertise on the best private equity CRM software that meets those needs. We will compare 5 different CRMs and shed light on what features investors should look for.
Private equity CRM software, or PE CRM, is a centralized system that allows private equity investors to manage investor relations, monitor and analyze portfolio performance, integrate fund accounting, automate workflows, and share this information across teams, all within one consolidated platform.
You might not have needed sophisticated private equity CRM tools a decade ago when investor relations seemed rather like a cozy chat between a CEO and an investment analyst, but you definitely do now.
Here are 3 reasons investors need centralized private equity CRM solutions today:
The best CRM for private equity is the one tailored to the needs of private equity investors, accounting for long deal cycles, investment contact types (company / intermediary / limited partner etc.), and unique workflows in the front, middle, and back-office investment process.
As such, ideal private equity CRM solutions should have the following functionality:
Features of Best Private Equity CRM
Deals are your bread and butter, and they need to be taken care of. While generic CRM software like HubSpot or Sugar CRM can help you get a 360-degree view of your deals by pulling them together into a single deal pipeline, the best private equity CRMs (which are those tailored to your business needs) allow you to filter your deals by investment history, asset type, deal size, and other investment criteria. From early-stage deal sourcing to post-investment activities, private equity deal management software helps you stay top-of-mind with your deals.
Data is the lifeblood of any CRM, just as it is for private equity investors. The best private equity CRM systems make it easy to capture, analyze, and visualize relevant client and investment data. You may not think the latter is a must have, but once you have your data pulled from different directions into interactive charts and graphs, you’re never going to return to spreadsheets.
It’s a major sin to give conflicting information to different parties, whether it be an intermediary, a limited partner, or a general partner. With well-organized PE CRM, you can interconnect your efforts across teams and give everyone access to past communications with clients and partners, so no repeat information is ever sent and no data is left behind.
Financial professionals all have their own way of doing things. Effective CRM for private equity firms should account for the old habits and give investors flexibility to integrate systems they like (Outlook or Gmail) and data sources they need (Preqin, Pitchbook, and other data providers).
No business is static. The best private equity CRM solutions are those that can change right along with any changes to the firm. A PE CRM platform that is customizable and flexible enough to scale along with the business will give private equity investors the freedom to grow their returns, without having to worry about outgrowing their private equity deal management software.
Even the best software for private equity might not always cater to the unique needs of private capital investors. So, it’s best to choose a system that would allow for flexibility in terms of dashboards, client profiles, and reporting tools to make your system aligned with your investment processes.
Right off the bat, the prize for being the most customizable system goes to Salesforce – the world’s most favored CRM platform and the foundation of most purpose-built CRMs that we will discuss further.
To help you make the right decision, we’ll take a look at five of the top private equity CRMs. By the end of this guide, you’ll have a clear understanding of what features for private equity you should look for and how to leverage them for growing your business.
Used by 150,000 businesses across the world, of all sizes, from investment banks to private equity firms, retail to government, Salesforce is the first name coming to mind when one thinks of CRM. Founded back in 1999, Salesforce has designed unique CRM products (called Clouds) to cater to the challenges of various business verticals, including finance (Financial Cloud).
Salesforce does not, of course, claim to have extensive expertise in private equity fundraising software. However, it does offer essential features like contact management (LP, GP, portfolio companies, etc.), lead management, dashboards, workflow automation, reporting AND infinite opportunities for customizations and third-party integrations.
Paired with the revolutionary, easy-to-use interface, these Salesforce perks make it the obvious choice for companies developing their own CRM solutions, some of which we list below.
So, Salesforce as private equity CRM software has the following advantages:
However, Salesforce is not a purpose-built CRM for private equity, meaning that you might need to develop additional fields or account types (LP / GP / intermediary) depending on how you run your business. This is not a problem with multiple Salesforce partners like Ascendix (we’re Salesforce Ridge Partner) who are more than happy to add this functionality for you.
The beauty of the Salesforce ecosystem is that it is like a blank page with unlimited tools for developing a PE CRM tailored to your needs from scratch. But be aware of additional costs.
This private equity CRM software is built on Microsoft Dynamics 365, Power Platform and the Azure Data Platform. It works towards managing fundraising and investor relations, workflow automation, and data analytics (Power BI). This functionality is split between 4 core solutions:
However, what we have learned over 8 years of partnership with Dynamics (we even have built our own CRM solution AscendixRE on it) is that Dynamics-based products 1) have a sophisticated interface that is NOT easy to use, 2) often have glitches and inefficiencies meaning that you will need to have an in-house tech team to properly maintain the system.
These were the main reasons why we migrated to Salesforce, and we never regretted it.
Delegate this to the experts. We have been at the forefront of CRM innovation for 26 years and do know how to meet private equity needs.
4Degrees is private equity CRM software developed by ex-investors for investors. The platform claims to be the best private equity CRM for its lead management, customizable deal flow, LP and portfolio management, and Email / calendar sync.
The system can also automatically score relationship strength based on prior interactions, giving investors more insight into the probability of deal success. Here is the whole list of features that set 4Degrees apart as one of best CRM for private equity:
These and other features tailored to the private investment needs set 4Degrees apart from generic CRM systems like Salesforce.
However, the customizability and integration opportunities of 4Degrees leave much to be desired. If in your private equity tool stack you have apps other than simple calendar or email, the system won’t offer you native ways to plug them in. You’ll need to use third-party integration tools like Zapier or outsource this to a third-party developer. This, however, places your data in a precarious position.
Dynamo is an investment technology company offering cloud-based solutions for the alternative investments space, including end-to-end private equity fundraising software, venture capital tools, real estate platforms, and more.
Dynamo has done a great job catering to the unique needs of private equity with its technology solutions for deal management, manager tracking and due diligence, investor relationship management, and workflow automation. And the beauty of this PE CRM is that you can mix these modules the way you want to get the best CRM for your private equity business.
The pros of Dynamo CRM for private equity are:
However, the limited API capabilities of the Dynamo platform make it impossible to natively integrate nontraditional third-party systems which you might be using within your business, so don’t forget to ask this question during the demo. On top of that, some users report that the user interface and tool board are not straightforward and could be hard to learn.
Developed on top of Salesforce, Altvia is another example of effective private equity CRM software. The CRM tool is packed with various features designed to help investors improve their productivity and close more deals. Altvia PE CRM caters to all investors’ needs with its modular structure consisting of 3 elements: CRM platform for key workflows, contact management, and relationship mapping; AI-powered analytics to drive insights; secure deal rooms.
Key Features:
This PE CRM is capable of some custom reporting which is great for those who often send quarterly reports and portfolio companies lists to stakeholders. However, the functionality is not always intuitive, and the designs are simple, so you might want to invest in a third-party reporting product.
Even such a proven CRM system as Salesforce might not always be the best CRM for private equity. This is where CRM consultants like Ascendix step in: we leverage the knowledge we have gained over the course of 26 years in the CRM space to help private equity investors tune their technology solutions to reflect their business nature.
Here is how we can help:
Should you need enhancement to your current CRM strategy, our private equity experts are here to help. Tell us more about your technology challenges and we’ll start looking into solutions today.
Alina is a forward-thinking writer specializing in Salesforce Consulting, Ascendix Products, and best commercial real estate practices. She shares her insights in engaging yet informative posts to help businesses get the most value out of the latest industry news and trends.
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