Middle-Market Deal Management: An Enterprise Software Solution

Collecting and managing deal data throughout the life cycle of a portfolio of investments remains a pressing challenge for commercial lenders. Enterprise platforms, while lesser known, are proven to be a powerful alternative to the more popular technological solutions available in the investment space. Software comp­anies like my own study deal management challenges and work to address them through innovative, client-focused technology. In our research and experience, businesses tend to turn to Microsoft Excel or Access to manage and report their deal pipelines and portfolio data. These systems require heavy tailoring to the businesses that use them, and are generally not integrated with CRM or portfolio management systems. Due to such limitations, these systems also require a great deal of manual data entry and re-entry to remain up-to-date and provide analytical value.

An alternative, however, is slowly gaining traction throughout the industry. It is the enterprise platform, which integrates core business processes and existing systems such as Excel and other third-party data sources into a single software architecture. Enterprise platforms are looked upon to provide availability and reliability of data, and when applied specifically to the deal management process, businesses report significant time-savings and higher levels of data accuracy.

Arguably, scalability is one of the strongest benefits to implementing an enterprise platform. The technology makes it possible, for instance, for a junior resource to simultaneously monitor portfolio information and trends across dozens of accounts. Or it becomes possible for a business to instantaneously generate portfolio-wide reports for an earnings release. Businesses are thus able to enjoy real-time data updates and automated reporting capabilities that are not feasible with other products. This type of platform manages everything from deal inception and pipeline reporting, to underwriting workflows and approval management, to portfolio exposure analysis and reporting. While Excel or Access is easier to implement in the shorter-term, the longer-term positive financial impact and process efficiency afforded by enterprise platforms outweigh the initial start-up costs.At Black Mountain Systems, the industry-standard enterprise platform we’ve developed is called Everest. The newest iteration and extension of this platform is Everest Mobile, which allows accessibility on touchpad devices through a secure internet connection. The following profiles are of two middle-market lenders, NewStar Financial inc. and Fifth Street Finance Corp., who implemented Everest in the last 4 years to facilitate their deal management processes. Both businesses have noted tangible business gains from adopting an enterprise platform.

NewStar Financial Inc.

Client Background: NewStar Financial Inc. is a Boston-based specialized commercial finance company that provides a range of senior secured debt financing options to mid-sized companies.

How Black Mountain Solved the Deal Management Challenge: “The robust reporting capabilities of Everest have made a huge difference for us. We have transparency and visibility of reporting that we simply didn’t have before. While our PMR quarterly report is done in the same way as before we got Everest, we save inordinate amounts of time when generating portfolio-wide reports because they are now automated. As a public company with published earnings releases, we use Everest to show portfolios by industry in real-time. Any day or any hour, we just push a button to generate a report in Everest and all of our data is up-to-date,” said Annie Fischer, Vice President. NewStar has also noticed a dramatic increase in data integrity. “Once a portfolio manager signs off on the data in his PMR, we no longer run the risk of the analyst making an error while doing data re-entry. We have more controls around the accuracy of our data. What took hours and hours to complete before Everest now takes very little time,” she said. Fischer also underscored the value of being able to easily search information on past deals and companies within designated parameters, and to isolate companies within any segment of the deal process, ie. prospect stage, approved stage, refinanced stage, etc.

Fifth Street Finance Corp.

Client Background: Fifth Street Finance Corp. is a specialty finance company that lends to and invests in small and mid-sized companies.

How Black Mountain Solved the Deal Management Challenge: Michael Shannon, Vice President, spoke of the benefits of Everest to his business: “In addition to providing better data integrity, Everest outshines competitors in its functionality. Since getting Everest, we are able to extract meaningful trends and information via its reporting features and data panels, and look across industries and sectors for new investment opportunities in a time-efficient way.” Shannon went on to explain how prior to implementing Everest, it was typical practice at Fifth Street to link more than 30 Excel spreadsheets together and to use a shared Outlook calendar to manage forward deals. Now, Everest is their comprehensive front-office platform, and has proven to be a reliable place to track forward deals, scheduled board meetings, and via simple integration with Salesforce, their deal pipeline.

“Admittedly, the cost of implementing Everest was time, energy and money. But while Excel was much easier to get started with than Everest was, the longer-term benefits to having Everest outweigh the initial cost. We have also been afforded tremendous scale with our in-house resources since adopting Everest. Monitoring portfolio information and trends within these respective accounts is much more efficient, since we can build a standardized template that pulls all the data that we need. A junior resource can monitor and draw from 10-15 accounts at once, which was previously not possible,” he said.