Copula Private Markets Survey.pdf

Industry Survey by Copula
Private Equity / Private debt
2023
Securitisation Terminal - Deal Flow Solution • Analytics • Book-Building • Open Ecosystem • ESG Ready

• The survey was carried out through various media, including LinkedIn. Each
question was answered by 15 to 200+ people, with the average being
around 100.
• Although the majority of respondents (69%) have been affected by recent
interest rate hikes, they started the year positively with a busy January.
• We conducted a comprehensive survey among a panel of private equity
and private debt players, with about a quarter involved in both.
Half are regularly involved in securitisation.
• The fund raisers are optimistic and anticipate raising more capital in 2023
than in the previous year.
• Half of the panel expressed interest in investment opportunities in Europe.

Technology
• The findings revealed that digital ledger technology is seen as
unlikely to have a disruptive impact on the structured finance
industry in the near future.
• Respondents were more enthusiastic about the potential of AI,
although it is not yet seen as ready for deployment without
human supervision.

Barriers to business growth
• Regulatory barriers, difficulty to understand foreign markets and
insufficient local connections continue to hinder cross-border
transactions.
• The implementation of a Capital Markets Union (CMU) in the
EU would be a significant enabler.

Data analysis
• Contrary to expectations, data rooms were not highly valued by
decision-makers, who instead preferred a shorter summary of the data
given by analysts or even potentially automated in the future.
• The results also indicated that while data analysis plays a large role in
investment decisions (42%), current investment trends and the
reputation of the counterpart(s) is also key factors (together 49%).
• Investors prefer to price a transaction by assessing the quality of the
underlying asset, which requires data analysis. However, a third of
respondents would simply use a price adjustment method to address
this issue and include the risk factor in the price.

Process improvement
• A previous analysis indicated that the greatest potential for
improvement lies in relationship management and transaction
preparation, which together account for 75% of inefficiencies.
• Respondents were asked for suggestions for improvement, but
there was no clear consensus. Automation could provide a
solution, but originators and arrangers prefer to maintain a
personal connection with their counterparts.
• Two-thirds of respondents considered face-to-face meetings to be
crucial for developing business relationships.

Digital solutions
• According to the survey results, only 35% of structured finance
transactions are currently digitised, but a trend is emerging as
25% of respondents are looking for digital solutions.
• Most people are not looking for more analysis or deal flow tools,
rather for practical solutions to improve their current processes.

Main needs
• Both originators and investors are looking for ways to grow,
respectively to attract financing and to find opportunities to
deploy capital.
• Arrangers are looking to increase the size of deals and manage
a higher volume of inbound requests.
• Most respondents (60%) felt that they could reach the "big
league" through an in-house CRM or by participating in trade
shows.

ESG
• While the large majority of respondents believe in impact
investing, they do not trust their financial services provider to
effectively integrate ESG data into their systems.
• Only a quarter of the transactions currently collects ESG data,
which highlights the long road ahead for sustainable finance.

Respondent Profile

45%
30%
25%
Are you in Private Equity or Private Debt?
Private Equity Private Debt Both

62%
38%
Was January a busy month for you?
Yes No

21%
69%
10%
Are rate hikes good for your business?
Yes No Neutral

83%
17%
Are you planning to raise more capital in
2023 than last year?
Yes No

52%
36%
12%
Are you involved in securitisation?
Yes No I would like to learn more

50%
30%
20%
Are you interested in investment
opportunities in Europe?
Yes If only could fine some… No

Technology

31%
69%
Do you think DLT will disrupt structured
finance within 2 years?
Yes No

71%
29%
Would you trust AI to improve the quality of
investments?
Yes No

27%
25%
49%
Would you consider AI to draft your
business contract?
Yes No Why not, if checked later

18%
83%
Would you trust AI to be the final quality
control for your investment term-sheet?
Yes No

Barriers to business growth

33%
33%
33%
What is your main obstacle to the
development of cross-border transactions?
It's a regulatory nightmare Understand the foreign market
Find right local connections

Data analytics

17%
38%
45%
Who checks the data in your data room?
Decision makers Analysts only Both

73%
6%
21%
Would you find it useful to automatically
summarise a large prospectus into a usable
12-page summary?
Yes No Analysts do that anyway

42%
10%
39%
9%
What do you value most when making an
investment decision?
Data analysis
Reputation of the counterpart
Asset class / sector / trend
Other

65%
30%
5%
How do you address portfolio quality of
your transactions?
Pre-screen the exposure using data analysis
Statistically 'price' bad news
Other

Process improvement

27%
20%
27%
26%
Which step in the deal preparation requires
the most efficiency improvement?
Filing paperwork
Term-sheet (structuring)
Term-sheet (legal)
Communication among parties

62%
31%
7%
Which stage of the client coverage work
flow primarily requires efficiency
improvement?
Onboard / check client data
Get in touch / filter leads
Prepare phased data disclosure

64%
27%
9%
How important is it still to meet in person to
develop a business relationship?
Very important It helps Not important

Digital Solutions

20%
15%
40%
25%
Are you using a digital solution to
streamline your deal flow?
Yes - internal Yes - SaaS
No Searching for a solution

21%
21%
29%
29%
What is your main pain with your SaaS?
Cumbersome data onboarding Closed ecosystem
Connection with other tools Dependency on the provider

74%
26%
When engaging with a SaaS provider, do
you consider the cost of changing it later?
Yes No

30%
48%
17%
5%
Would you register on another platform to
find private markets opportunities?
Yes Yes to test, if free No No, I have one

Main needs

41%
19%
40%
What do you need most at the moment?
Find more investors Streamline the deal flow
Find more opportunities

38%
21%
8%
33%
What is the most important for you today?
Manage larger transactions Better dealflow software
Better analytics More inbound requests

37%
11%
26%
26%
How could you manage larger transactions?
Scale up through digitisation
Hire more staff
Reach to larger originators
First deal to build upon

36%
40%
24%
What is the best way to generate more
transaction inbound requests?
Myself with a CRM Digital marketplaces
Fairs and seminars

49%
33%
10%
8%
To scale up your business, what do you
need to improve first?
My reach My profitability My credibility other

ESG Matters

55%
31%
14%
Do you believe in impact investing?
Yes No What is it?

13%
87%
Are you sure your financial services
provider has a system to integrate ESG data
and provide you with the analysis?
Yes No

26%
74%
Do you collect ESG data for your next
transaction?
Yes No

Thank You
Visit our website: https://copula.ch
contact us info@copula.ch

Copula Private Markets Survey.pdf

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