Why Asset Management Companies Need To Embrace Market Research

Published on Feb 03, 2023 by Ed Rodgers

Market Research Can Bring Critical Insights To Every Asset Management Organization

Buying, growing, and selling companies require a lot of information for success. The amount of due diligence for an asset management company to either acquire or determine the market value of a company can be exhaustive. One step that asset management sometimes overlook is employing several research efforts to aid in their work. Market research can be conducted from different perspectives related to certain industries, organizations or audiences to gain insights beyond the financial to asses the opportunities or challenges facing an investment.

Here are three critical areas where market research supports Partners, Principals, and Associate leverage market research in vetting and growing portfolio companies.

Due Diligence On Acquisitions 

Marketing research as part of the pre-investment due diligence process can provide a broader perspective of the competitive landscape and customer sentiments. This objective read on how loyal and satisfied the customers of a potential investment are to understanding the strength of a brand relative to competitive marketplace can provide important assessment to opportunities and challenges facing the new owners.  

Growth Strategy For The Portfolio Company  

Once the PE/VC firm makes an investment in a company, providing the insights they need for strategic growth and even an updated strategy is a powerful sign of confidence to the company. Aligning new product concepts and service innovation, customer experience optimization can help reveal the order of need based on the customer or industry feedback. These insights allow leaders to know where and how to build the longer-term strategy for the new addition to the portfolio. 

Selling Points And Perceptions For Exit Plan 

Lastly, when an asset is requiring an exit strategy (i.e., IPO, divestiture, or sale) it is critical to have the insights on the strength and growth potential. Areas such as equity with its customers, the competitive strengths and how to position the company to the markets can support the conversation related to the exit plan. Having the data supported insights that are current and used as both a selling point but also to support the company‚Äôs valuation will enhance and potentially shorten the exit timeline 

Market research use of many different approaches for the different needs is where asset managers can truly capitalize for success. Every acquisition, company owned, and sale will have unique circumstances that need to be addressed. The research tools that market research can utilize to deliver insights to help remove the unknowns from each area. Using tools such as AI and text science to get the sentiments and influencing perceptions of customers to traditional survey methods like discrete choice and segmentation can deliver specific and relevant data to support the asset management endeavor. 

Click here learn different approaches and opportunities market research can provide an asset management company.

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