73 Strings' Yann Magnan - the opportunity for AI to automate private markets

Welcome back to the Alt Goes Mainstream podcast.

Today’s episode is with a founder who is building mission-critical valuation and portfolio monitoring software for alternative asset managers.

We are joined by Yann Magnan, the Co-Founder and CEO of 73 Strings, to discuss how valuation work and portfolio monitoring is moving from manual to automated and why that’s so important for the industry. 73 Strings has leveraged AI and automation to more seamlessly and cost-effectively extract data, monitor portfolios, and streamline middle-office processes for valuations. 73 Strings works with a number of the industry’s top alternative asset managers and has received investment from Blackstone, Fidelity International Strategic Ventures, and Broadhaven Ventures, amongst others.

Yann has brought his experience as a senior member of the Duff & Phelps team, where he was EMEA Market Leader and member of the Global Operating Committee and as a Partner at EY’s Transaction Advisory Services to help bring valuation and portfolio monitoring solutions into the mainstream.

Yann and I had a fascinating conversation about how technology innovation is impacting private markets. We discussed:

• The challenges with manual valuation services businesses.
• How to create uniformity and standardization with private markets fund performance data.
• How AI is changing private markets post-investment reporting processes.
• Does automation in private markets help big funds or small funds more?
• The evolution of post-investment private markets market structure.
• The biggest technology innovation still missing from private markets.
• Why the growth of the wealth channel and evergreen funds increases the need for more streamlined reporting and valuation solutions.

Thanks Yann for coming on the show to share your views and wisdom on private markets.

A word from AGM podcast sponsor, Ultimus Fund Solutions

This episode of Alt Goes Mainstream is brought to you by Ultimus Fund Solutions, a leading full-service fund administrator for asset managers in private and public markets. As private markets continue to move into the mainstream, the industry requires infrastructure solutions that help funds and investors keep pace. In an increasingly sophisticated financial marketplace, investment managers must navigate a growing array of challenges: elaborate fund structures, specialized strategies, evolving compliance requirements, a growing need for sophisticated reporting, and intensifying demands for transparency.

To assist with these challenging opportunities, more and more fund sponsors and asset managers are turning to Ultimus, a leading service provider that blends high tech and high touch in unique and customized fund administration and middle office solutions for a diverse and growing universe of over 450 clients and 1,800 funds, representing $500 billion assets under administration, all handled by a team of over 1,000 professionals. Ultimus offers a wide range of capabilities across registered funds, private funds and public plans, as well as outsourced middle office services. Delivering operational excellence, Ultimus helps firms manage the ever-changing regulatory environment while meeting the needs of their institutional and retail investors. Ultimus provides comprehensive operational support and fund governance services to help managers successfully launch retail alternative products.

Visit www.ultimusfundsolutions.com to learn more about Ultimus’ technology enhanced services and solutions or contact Ultimus Executive Vice President of Business Development Gary Harris on email at gharris@ultimusfundsolutions.com.

We thank Ultimus for their support of alts going mainstream.

Show Notes

00:00 Introduction and Sponsor Message

01:56 Welcome to Alt Goes Mainstream

02:05 Introducing Yann Magnan and 73 Strings

03:56 Yann's Background in Valuation Services

04:33 The Inefficiencies of Manual Valuation

05:20 The Genesis of 73 Strings

06:11 The Importance of Experience in Private Markets

06:24 Automating Valuation Processes

08:32 Challenges in Standardizing Valuation

09:13 The Role of Human Judgment in Valuation

10:24 AI's Potential in Valuation

11:10 Accountability in Automated Valuation

12:47 73 Strings' Data Handling and Partnerships

14:07 Standardizing Data Across Portfolios

15:44 Impact of Automation on Human Processes

17:02 Growth of the Wealth Channel and Evergreen Funds

17:59 Accelerating Need for Better Valuation Software

19:37 Challenges of High-Frequency Reporting

19:59 Technological Implications of Daily Valuation

20:31 Private Assets and Technology Infrastructure

20:44 Industry Resilience and Smart People

20:59 Forefront Firms and Blackstone Partnership

21:48 Valuation Process and Data Control

23:11 Extensibility to Other Asset Classes

24:12 73 Strings' Versatile Platform

25:13 Howard Marks on Asset Allocation

25:52 Atomic Unit of Value in Valuations

27:31 Data Sharing Across Business Units

30:24 Automation Benefits for Large and Small Firms

31:33 Building Technology for Large Firms

34:16 Trust and Experience in Client Relationships

35:09 Strategic Investors and Their Value

37:37 Industry Participation and Standardization

39:13 Maturity and Cost of Technology

40:22 Future of Data in Private Markets

41:39 Convergence of Private and Public Markets

42:11 Volatility and Transparency in Private Markets

43:14 Attracting Retail Investors

44:41 Conclusion and Final Thought