CASE STUDIES

Leading private equity firm: designing an IT target operating model

EXPERTISE

Our client, a leading private equity (PE) company, needed support to design a best-in-class IT target operating model that would facilitate the next stage of its rapid growth of workforce and assets under management (AUM). To achieve this, we conducted a detailed assessment of the existing structure and designed a full capability uplift plan, in addition to anticipating any future demands that would arise from integrating new acquisitions and onboarding new material service vendors. As a result, our team delivered on the CTO’s vision to make IT a driving, future-ready force for our client.

Outcome 1: Identified and implemented a new low-cost, high-quality location for efficient staff growth
Outcome 2: Realised 30% cost savings against top-3 third party service providers
Outcome 3: Reduced operational risk and enhanced service quality through superior delivery capabilities

The Challenge

Following the PE boom years of cheap money and high growth, the industry is now experiencing increased operational costs, difficulty in raising new funds and delays in disposing of acquisitions. This allows limited partner investors to be more discerning with where they allocate funds, meaning that any publicly known cyber or operational breach would severely impact reputation and the ability to raise new funds.

Our client, one of the world’s largest PE companies, has an aggressive growth strategy and therefore needs its internal operations to accommodate and enable this growth. Specifically, the IT department is required to ensure stability, security and improved operability whilst controlling costs. They had also recently made the acquisition of a number of asset managers to build out variety in asset classes, each of which required integration within the Group. As a result, it was a Group priority to simplify the operating model to control costs and reduce risks. In addition, the integration and industrialisation of processes across all entities was a prerequisite for both realising operational efficiencies and the standardisation of performance quality.

The Approach

Our approach focused on assessing the existing structure against industry best practice to identify gaps in capabilities. Our financial services experts also reviewed material third party suppliers for quality of service and value for money. Through this analysis, we were able to define the processes, technology and resources required to close the gaps and put our client’s IT department on the front foot to drive the business growth.

We designed an implementation roadmap and executed the initial phases for our client, delivering on a new low-cost, high-quality location that resulted in immediate savings and improvement in team capability. We then identified and implemented transition strategies for material third parties to improve the service quality while still reducing costs. We also conducted an RFP process to establish new cyber security capabilities and initiated the integration across the whole technology estate. A new organisation structure for our client’s IT team was also defined and approved by our specialists, delivering key new capabilities to ensure they can deliver on strategic objectives going forward.

The Impact

Our experts delivered material, multi-million GBP cost–savings whilst enabling our client to scale their IT operations efficiently, delivering against their broader organisational strategic growth objectives. We also established strong risk controls for critical processes and material vendors to build operational resiliency through the ongoing growth period. As a result, the IT department is directly driving the growth and industrialisation of the business and our client continues to maintain their leading market position.

Private Equity