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CRM

Sterlinks subscribers can read more about how cloud technology is changing the game for real estate investors, in my piece for the PREA Quarterly this month.  PREA subscribers will also receive a copy of this piece.

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Previously in this space (“Capital Surge” and “Capital Surge: Part 2“) we’ve discussed a couple of interesting conclusions from the Cornell University’s Baker Program in Real Estate & Hodes Weill study the “2013 Institutional Real Estate Allocations Monitor” in relation to more recent news.

A third key take-away from the survey that caught our attention is the shift towards an increasingly global, cross-border investment strategy for many institutional investors. One of the more revealing stats is that Asia-Pacific investors are currently under-invested by 130 bps and also plan to raise their targets by 140-150 bps (i.e., almost 300 bps of their portfolio’s total size will be newly invested in real estate in the near-term).  So, don’t be surprised as this set of investors ramps up their investment quite rapidly.

In addition, despite being not as under-allocated, 38% of North American investors (compared to 24% of investors from Asia-Pacific) revealed their intent to increase their investment into private real estate during 2014, according to data-provider Preqin.  So whether capital placement is driven by need or want the conclusion remains that capital placement certainly will be on the rise, and not only in investors’ back yards.  For instance, of the North American investors seeking investments in the next 12 months, 38% are targeting Europe, which is up from 17% a half-year ago. 60% of Asia-Pacific investors are aiming at Europe, versus 39% a half-year ago.  Those are impressive jumps.

Furthermore, CBRE released a report earlier this week regarding Middle East capital flows into real estate (“In and Out – Middle East”). This research report anticipates a substantial amount of capital flowing from that region over the next decade.  CBRE estimates $180 billion will be invested by Sovereign Wealth Funds (SWFs) and private investors from the Middle East in Europe (80%), the Americas (10%) and Asia-Pacific (10%). The domestic markets don’t have nearly enough volume to absorb the SWF’s investment targets, hence the capital predominantly goes internationally. By comparing this amount to the $45 billion invested between 2007 and 2013 we can begin to understand how significant an increase it is.

Therefore, in order for these investors who are escalating their investment volumes internationally to invest further and further from their front door, it requires technology to bridge that geographic gap.  Evolving technology will allow institutional investors to use their resources effectively from a central base – for both identifying & sourcing investment opportunities as well as organizing multiple due diligence processes efficiently.   Moreover, investment managers can benefit from the same technology by being able to extend their marketing reach to capital partners further afield.

This is the Sterlinks blog. Access Sterlinks tools to maximize your internal resources by visiting http://www.sterlinks.net.

For Immediate Release

For Immediate Release

CalSTRS Adopts Sterlinks Due Diligence Technology and Joins Sterling Analytics Advisory Board

Sterlinks software platform offers California pension plan investment team broader market data, enhanced transparency with investment managers, and longer-term visibility on potential investment partners

SAN FRANCISCO, June 10, 2014 — The California State Teachers’ Retirement System (CalSTRS) this week adopted Sterlinks, a cloud-based utility that automates due diligence and analytics on investment opportunities. Sterlinks is the flagship technology product of Sterling Analytics (http://www.sterlinganalytics.net).

In addition to adopting the Sterlinks platform to expand and improve CalSTRS due diligence capabilities on global real estate investment opportunities, investment officers Josh Kawaii-Bogue and Kevin Bassi will represent CalSTRS on Sterling Analytics’ Advisory Board.

CalSTRS is interested in leveraging technology and data to improve its investment process.

CalSTRS expects to use the Sterlinks platform to augment internal resources and reduce costs related to travel, document retrieval and administrative tasks.

“We believe Sterlinks gives the CalSTRS investment team access to a broader set of data and analytics related to investment opportunities, fund managers and operators.  This will support our investment staff in navigating complex global real estate markets where access to the best local expertise and market data can be an advantage,” said CalSTRS Director of Real Estate, Mike DiRe.

“We hope to use the data and analytics gained from the Sterlinks platform to supplement our research on major investment decisions related to our $22.4 billion real estate investment portfolio,” said Investment Officer Josh Kawaii-Bogue.

“CalSTRS leadership is charged with steering the second-largest pension fund in the U.S. We look forward to supporting them with technology to achieve their investment objectives effectively,” said Meera Balakumar, Director of Sterling Analytics.

The Sterlinks platform will offer the CalSTRS real estate team the following principal tools:

  • Partner Due Diligence hub: to centralize and automate due diligence on global investment managers and operators;
  • Sterlinks Notebook Client Relationship Management (CRM): to track and manage new and existing investment relationships; and
  • Network Builder: for desktop and mobile-enabled networking with global real estate investors, managers and operators.

About Sterling Analytics

Sterling Analytics provides institutional investors with technology tools designed to help them identify investment partners, build intelligent partner relationships, and manage partner due diligence. Sterling Analytics’ flagship next-generation due diligence software, Sterlinks, is tailored to the needs of the institutional investment process. The Sterlinks platform integrates client relationship management (“CRM”), networking, due diligence and analytics to strengthen and build capital partnerships.

About CalSTRS

The California State Teachers’ Retirement System, with a portfolio valued at $183.8 billion as of April 30, 2014, is the largest educator-only pension fund in the world. CalSTRS administers a hybrid retirement system, consisting of traditional defined benefit, cash balance and voluntary defined contribution plans. CalSTRS also provides disability and survivor benefits. CalSTRS serves California’s 868,000 public school educators and their families from the state’s 1,600 school districts, county offices of education and community college districts.

Contact:
Sterling Analytics Press Team
+1(415) 868-5391
info@sterlinganalytics.net
www.sterlinks.net
www.twitter.com/sterlinks

Software and technology offerings to the private equity industry are evolving rapidly.  A disparate set of choices exist for you, the intrepid investor trying to maximize time spent on accretive core activities (such as investing) while minimizing time spent on predicting software failure.  Often, you never know whether a solution will work for your platform until you try it, and by then, it’s too late – your team has spent hours in training learning to navigate complex input and output mechanisms. Time has already been spent accommodating finicky technical capabilities.  Some members of your team may opt out entirely, creating a rift in the flow of information.

Our ongoing chats with the global institutional investment community – investors, operators, and managers alike – make it clear: everyone needs better technology to advance mission-critical functions.  From Tokyo to London to San Francisco, and cities in-between, the institutional private equity industry is ready for good software.

Pick ten of your peers and ask them what kind of technology they use to manage capital partnerships.

Chances are, one or two of those ten will have adopted software to facilitate their partnerships with investors, operating partners and/or managers.  Typically, this is a “CRM” system, data room and/or portfolio management software.  (If you travel exclusively with those who do a relatively good job of keeping ahead of the pack, closer to six in ten of your peers may have adopted software of some sort).

You may find it interesting to inquire exactly how many of those folks are actually happy with their software choice.  You may want to ask whether (and in which use cases) the software adequately performs for them.  It is worth the investigation if you’re considering purchasing a system yourself.

We won’t deny that we’ve heard some horror stories.  And yet, to avoid technology at this hour is to play fast and loose in a highly competitive, increasingly sophisticated business environment.  Rodney June of the $21.8 billion Los Angeles City Employees’ Retirement System pointed out to us that technology decisions are an important component in evaluating a manager.  Tom Lopez of the $16.7 billion Los Angeles Fire and Police Pension Plan advises: don’t let technology get in the way of communicating quickly and effectively with your potential investment partner.

The fact remains that software for the PE industry is relatively new, highly fragmented, and broadly untested. However, smart investors will pick a horse and start moving up the learning curve sooner rather than later.

This is the Sterlinks blog. Access Sterlinks tools to maximize your internal resources by visiting http://www.sterlinks.net.

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