Tag Archives: Research and Analytics

Business Research is an important element for a growing company. The requirement for effective business research is to be on the dot, quick, actionable and still cheap. If you are at a company, managing it is comparatively easy, with a vendor who has a long-standing relationship with your company delivering on expected assignments which are often repetitive in nature.

But when you have the responsibility of multiple portfolio companies, which may be operating in similar or different industries, there are other complexities that creep in. The nature of assignments may not be necessarily repetitive; a specialization may be required to understand the nuances of valuations, fund-raising, and exits. Also, all companies are different cost centers with their dedicated management and boards. As the mandate is to grow companies aggressively, a lot of research may be required in traditional areas as well as lead generation, market studies, competitive intelligence, etc.

A solution that investors have been working with is to have a Research function or resources in each of the portfolio companies. Not only does it lead to higher costs, but there is also no cross-pollination of learning from one company to another. Research now is so sophisticated that it requires not only the research expertise but elements of social media, design, editing and when dealing with an investment portfolio, knowledge of fund-raising environment too. It’s difficult to have all these skills in a single company without incurring challenges in terms of costs and resource availability. Picking up a resource from one company and deploying it in another will have challenges as both entities will have separate P&Ls.

A solution that plays further over the advantages of traditional outsourcing is to have a centralized research team in a low-cost country like India. FTEs (Full-time Equivalent) act as full-time employees of the investors. The team can be scaled up or down depending on the work requirement. Work can be prioritized in accordance with the schedule of board meetings of different companies. The investor gets multiple resources with varying skills at a cost centralized for multiple companies, that doesn’t break the bank. Invoices can either be raised on the investor, who can then allocate it to the portfolio company or directly to the portfolio companies. Costs are competitive as the scale of work gets combined for multiple companies. Specific events related to fund-raise, valuations, M&A and exits, that trigger heightened research demand, can be met with additional resources offshore and after these events, the team can be ramped down. Cross-pollination of knowledge from one company to another is seamless and doesn’t get lost in transition.

Magistral Consulting has helped multiple investors, who are on multiple boards to implement their ideas across the portfolio companies with centralized outsourced research function.

The Author of this post is CEO of Magistral Consulting and can be reached at Prabhash.choudhary@magistralconsulting.com for any queries, work samples or clarifications

Keywords/ Tags: Portfolio Companies Management, Private Equity, PE Firm, Provider, Portfolio Company, Public Companies, Private Equity Firm, Portfolio Management, Portfolio, Venture Capital, Management Team, Investment, Asset Management, Company, Venture Capital Firm, Firm, Investment Opportunities, Asset Manager, Private Equity Investors, Capital, Private Equity Funds, Due Diligence, Investor, Senior Executives, Real Estate, Saas, acquisition, management, asset, cash flow, hedge funds, portfolio manager, emerging markets, fund managers, buyout, risk management, equity investment, service provider, financial services, wealth management, fund, strategic acquisitions, marketer, private equity portfolio, corporate governance, global provider, venture, capital structure, analytics