Opportunities for boutiques: bulging at the seams

In what has traditionally been an industry driven by personal relationships, innovative firms are harnessing the combined power of human experience, workflow tools and data insights to increase origination flow, opportunity conversion and profitability.

We have seen three critical trends emerge that differentiate successful firms:

1. Beware the calm surface

Traditionally, senior bankers have focused on driving revenue and engaging with potential clients and investors, while junior staff support these activities – producing collateral, writing reports, chasing up opportunities and conducting deeper analysis.

For the senior executives at the top of the chain, the process generally looks smooth. But the activity happening out of sight to support them is too often plagued by complex, messy workflows, duplicated efforts and manual processes. The surface looks calm, but it hides the chaos and inefficiency beneath. 

Industry trends like juniorisation, hybrid working and push-back on long working hours can make this lack of scalability all the worse and more difficult to recognise and correct.

Successful corporate finance boutiques have begun to counter this “ignorance is bliss” culture, directly identifying areas where they can cut manual tasks and eliminate duplication with the right technology tools. 

For example, let’s look at the work required to develop buyers lists.

We’ll start with the worst case scenario: a corporate finance boutique with a team of junior employees working with manual processes, spreadsheets and disparate contact lists.

• Relevant information is siloed. That means the time required to generate lists and the quality of participants is often restricted by limited insights based on deal history and holdings – without incorporating deeper, richer relationship data 
• Getting buyers engaged and generating indications of interest is a manual, iterative process. It involves sending emails, follow-ups, and then following up on the follow-ups! It’s extremely time consuming, and it’s easy to miss relevant messages
• Tasks such as project status updates and buyer list development are generally started from scratch each time because content isn’t centralised; scattered across individual PowerPoint or Excel documents

Effective buyers lists are built on rich data from multiple sources: transactions, portfolio and holdings data, historical project information, account and contact information, relationship insights and more. As we’ve seen, finding, collecting and analysing all this data is an extraordinarily time consuming and frustrating task when done manually. And without systems to incorporate previous buyers lists into any new ones, teams are starting from scratch every time – and losing valuable insights e.g. previous buyers list participants who always sign the NDA but never move forward! 

But there’s a better way.

Bringing data and workflows together and adding automation can both reduce manual effort and drive engagement. For example, firms can use tools to follow up when a specific event occurs (or does not occur) by sending follow-up messages two weeks after a teaser is shared to recipients who didn’t open it. In our experience, this not only saves countless administrative hours, but improves the quality of outcomes.

In addition, teams can use previous buyers lists and participant progress to speed up the process of generating new lists

Firms can unlock deeper insights, improve client service and deliver huge time savings with technology tools that can capture information automatically from a range of sources, including external sources such as spreadsheets – often a key impediment to systemic workflows. Using a data-driven approach can reduce the time taken to construct lists by up to 90% – saving a day a week per person, while also increasing the quality of lists by expanding the number of data points used.

This enables banking professionals to benefit from joined up, accessible data, while reducing the impact on day to day workflows.

2. Rewriting the origin story

Deal origination is the key driver of revenue for a boutique firm. Identifying opportunities early, building relationships and demonstrating credentials requires the right combination of information, connections, access and reporting.

However, traditional approaches to deal origination – like leveraging personal or shared networks, using third party data sources such as industry publications and deal databases or specialist tools like relationship scoring tools – present difficulties. They can lack scalability and be difficult to integrate into existing workflows. 

Firms need to improve their origination processes, but how should they go about it? Using the right solutions which bring together first, second and third party data with capital markets specific workflow tools will allow firms to generate leads and guide next actions much earlier than traditional manual, siloed methods.

Often the impediment here is a lack of joined up datasets – for example, previous fund raises or deal transactions for a particular corporate is available within internal systems, but this data is only visible on the surface for “information purposes” and cannot be incorporated into workflows. That means that it’s difficult to look for the kind of information that can really guide next actions: “show me all corporates who have not raised capital in the past 3 years with whom we have had interaction in the past 3 months and who had read a recent report that we published on raising capital in current market conditions.” Siloed data makes it impossible – or at least extremely time-consuming – to sift through and locate the corporates who might meet this description.

By combining datasets we can unlock high value automated workflows. For example, rather than sending an email to teams curating today’s market news, automated notifications let the right people know when a firm is rumoured in the press to be seeking investment, or flag previous interactions with management at the firm, or bring up a history of buyers engaged on deals in the same sector. The message is mined out of public data and the information the firm already has, and the system also takes care of the means of getting in touch by generating and sending the notification.

Even better, these insights aren’t trapped in complex systems or tools that people rarely interact with. Instead, they’re delivered to banking professionals where they work – their inboxes and on their mobiles – in simple, fit for purpose tools.

3. Rethinking full service

Finally, innovators are also rethinking their approaches to leveraging the broader range of advisory services to support deal flow and conversion.

For example by repurposing traditional investment research produced by sales and trading functions, firms can demonstrate thought leadership and leverage readership to gauge interest in specific areas, helping to develop strong buyers lists. And by leveraging corporate access workflows to target participants, firms can deliver higher quality deal roadshows which improves their overall service while also introducing the benefits of operational efficiencies.

This more connected approach enables relationships with all a firm’s clients across public and private markets and trading and banking functions to be joined together, all while respecting regulatory and compliance requirements.

Activity	Traditional Approach	Data-driven Approach
Originating new deals	Scouring industry publications and the press for market activity and changes, phoning and emailing colleagues to see if they have contacts at these firms and attempting to arrange meetings with potential clients	Connecting third-party news & information  (e.g. people moves, advisor appointments) with internal data to identify new opportunities Leveraging data to identify pathways to connect and recommend next actions Deliver insights directly to email, mobile, browser to ensure no disruption to workflows Reduce manual activity by hundreds of hours and increase project conversion rates
Buyers List Development	Develop lists from scratch for every new opportunity, or pull together previous lists from spreadsheets Maintain / update individual lists on spreadsheets	Using historical buyers lists and outcomes to generate new lists Combining internal information (e.g. previous interactions, previous deal interest) with third party data (holdings, recent transactions, dry powder, etc.) to develop richer lists with higher engagement rates Create better lists in less time to save your people time and increase engagement by contacting more targeted groups
Buyer List Follow-ups	Manually follow up with each buyer via email or call to gauge interest and progress	Automated workflows to drive engagement, e.g. programmed follow-up emails to all participants who requested and received a teaser, without the need for manual intervention
Tearsheet and Project Status Updates	Manually update project status reports by reviewing all activity across email and notes	Ambiently capture all project updates via email, call and collateral development One-click output of branded and formatted updates and tearsheets
Leveraging Sales & Trading and Research	Limited or ad hoc leveraging of research content (e.g. sector research, thematic research) to drive engagement and generate interest	360° view of corporate and investor clients across public and private banks Seamless wall crossing for analysts Leverage research content and market activity information to engage and inform existing and potential customers Expand the number of datapoints available to target buyers and identify potential deals

 

While traditional firms are rethinking operating models and location of services – such as offshoring pitchbook creation – it’s becoming clear that this incremental approach to driving improvements is being rapidly surpassed by a new, data-driven approach that is not only transforming how things are done, but also how success is measured.

If you would like to learn more about how Singletrack can help you realise the goals of data-driven advisory within corporate finance, get in touch now.