Episode Details

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, Growth Equity at Goldman Sachs Alternatives, Hamilton Lane, Golub, 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 and AI are impacting private markets and perspectives on valuation work today. 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 expertise, insights, and passion about private markets.

Show Notes

00:00 AI Since Day One

01:06 A Message from our Sponsor, Ultimus

02:02 Introduction to Yann Magnan

04:11 From Manual To Automated

04:44 Excel Google Email

04:58 Cloud And Early AI

05:07 Governed Auditable Process

05:30 Founding 73 Strings

05:36 Two Valuation Platforms

05:55 Scaling With Alts Growth

06:28 Evergreen Acceleration

06:54 Retail Investor Expectations

07:09 Transactions Need Fresh NAVs

07:44 Valuations For Transactions

08:14 Continuation Vehicles Context

08:42 Reporting To Trading Shift

09:07 Illiquid Vs Liquid Compare

09:18 Mimicking Public Markets

09:43 Valuation Philosophy Changes

10:27 Back Office To Front Office

11:25 New Stakeholders To Balance

11:59 Why Private Must Feel Public

12:20 Transparency And Liquidity

13:18 Is Liquidity Good

15:11 Evergreen Process Differences

16:09 Higher Frequency Requirements

18:00 Tech Leverage Points

18:53 People Plus Technology

19:44 Portfolio Data As DNA

21:02 No Single Valuation Standard

21:47 Consistency Over Time

22:20 Human In The Loop

22:42 Art And Science Framework

24:03 No One Best Method

24:55 Wealth Channel Education

25:30 What LPs Should Ask

26:46 What Top GPs Want

27:38 Global Tech Adoption

28:49 Fundraising Drives Ops

30:23 AI Data Extraction Story

31:48 Standardizing Data Labels

32:21 Data Model Requirements

32:52 Is Data A Moat

33:14 Turning Data Into Insights

33:54 Scale Versus Specialization

35:04 Tech Helps Small Managers

36:21 AI Impact On All Funds

36:44 Starting Before GenAI Boom

37:42 ML And NLP Foundations