Why Do Investment Firms Need Expert Networks?

  • Anuj Saxena


<p><img src="https://kradminasset.s3.ap-south-1.amazonaws.com/ExpertViews/Banner.jpg" /></p><p>Expert networks are gaining popularity among investment management firms, as consultations with subject matter experts can yield valuable insights for more profitable acquisitions. The investment industry, which includes hedge funds and mutual funds, is the biggest user of expert network services.</p><p class="bbox"><em>By </em><a href="https://www.knowledgeridge.com/Expert-Network-Services" target="_blank" rel="noopener"><em>connecting businesses with subject matter experts</em></a><em> in various fields, expert network firms provide investment firms with a competitive advantage in the form of industry-specific market intelligence.</em></p><p>Whether you represent a private equity firm, asset management company, or investment management strategist, making significant investments in business sectors where you have little or no prior experience and in-house expertise can be daunting.</p><p>This is where expert network firms come in &ndash; they provide access to relevant resources that have the proficiency in assessing the viability of planned investments.</p><h2><span style="font-size: 14pt;"><strong>Expert Networks and Investing </strong></span></h2><p>Though the phrase was first used in 1997, expert networks gained popularity around 2000. Over the years, the expert network business has become more streamlined and regularized.</p><p>Since 2009, when some spurious investments were made by clients based on insider tips, regulations have tightened around the types of information that experts or subject matter experts (SMEs) are authorized to provide to client firms. The permitted uses of the information received are also strictly regularized.</p><p>Suppose an SME is working with a publicly traded company. In that case, the Expert Network will avoid using that SME for their client, whose interest is in that publicly traded company. This is to prevent compliance issues where there is a possibility of the SME inadvertently or deliberately disclosing insider information to the clients (users of the expert network).</p><h2><span style="font-size: 14pt;"><strong>Why do Investment Firms Need Expert Networks?</strong></span></h2><p>Expert networks provide a one-stop shop for investment management firms looking for industry-specific knowledge and experience that can be leveraged towards guiding the direction of investment strategies, helping with decision-making, accurately projecting business outcomes, and streamlining processes.</p><p>As a result, most 'use cases' for Expert Networks in the investment business are about analyzing the suitability, opportunities, and risks associated with specific investments. This can be for Private Equity, Public Equity, or Credit investment and is typically reserved for long-term investors who conduct extensive fundamental research rather than short-term investors.</p><p>Another important application, particularly for management consultants, is acquisition due diligence. <em>Expert Networks have become fundamental to due diligence work</em>. The subject matter experts provide comprehensive and in-depth insights, which are especially useful for forward-looking time assessments, like estimating future revenues and cash flows.</p><p><img src="https://kradminasset.s3.ap-south-1.amazonaws.com/ExpertViews/Image-2.jpg" /></p><h2><span style="font-size: 14pt;"><strong>In-demand Expertise for Investment Firms</strong></span></h2><p>Asset and investment management firms, hedge funds, and private equity firms rely on expert network services to make informed investment decisions in various sectors.</p><p>With advice from highly experienced experts, businesses can take the guesswork out of strategic decisions, speed up various business processes, create robust go-to-market strategies, and gain perspectives they may not have considered.</p><p>Expert insights can also guide organizations towards efficient brand rebuilding or expansion efforts, considering and analyzing various dynamic market factors.</p><p class="bbox"><em>A competent expert network firm can hand-pick and custom-vet relevant experts from around the world who are ideally suited to the expertise you require.</em></p><h2><span style="font-size: 14pt;"><a href="https://www.knowledgeridge.com/c/CaseStudiesDetails/26" target="_blank" rel="noopener"><strong>How Do Investors Use Expert Networks &ndash; A Case Study</strong></a></span></h2><p>A privately owned global investment management firm with approximately $70 billion in assets across all major asset classes needed expert advice on the impact of a recent merger between two major global insurance providers.</p><p>Knowledge Ridge chose relevant experts from the United States and Europe who had recently worked for the two insurance conglomerates and other insurance industry experts. They were meticulously custom vetted through phone interviews to determine their direct involvement and were chosen based on their expertise and experience in providing a deep dive into the impact of the merger.</p><p>As a result, the client gained first-hand perspectives and actionable insights into the merger of the two large insurance companies under consideration and the newly formed entity's insurance business.</p><h2><span style="font-size: 14pt;"><strong>How Do Clients Communicate with Experts?</strong></span></h2><p>Through an expert network firm, <a href="https://www.knowledgeridge.com/Expert-Network-Services" target="_blank" rel="noopener">the client can select their preferred method of communication</a> with experts for the most prompt, effective, and actionable intelligence:</p><ul><li>They can speak one-on-one with relevant experts or participate in multi-participant <a href="https://www.knowledgeridge.com/Expert-Network-Services/Expert-Calls" target="_blank" rel="noopener">phone consultations</a></li><li>They could initiate <a href="https://www.knowledgeridge.com/Expert-Network-Services/Expert-Surveys" target="_blank" rel="noopener">targeted or customized surveys</a> in which an expert panel will provide tailor-made responses to key questions</li><li>They could also engage experts for longer-term assignments through workshops, technical IDIs, and field visits.</li></ul><p>You must ensure that the expert network firm under consideration has a <a href="https://www.knowledgeridge.com/Expert-Network-Compliance" target="_blank" rel="noopener">robust compliance framework</a> that can be customized to your specific needs.</p><h2><span style="font-size: 14pt;"><strong>The Knowledge Ridge Advantage</strong></span></h2><p>Looking for accurate, up-to-date industry knowledge to help you make strategic investment decisions to grow your portfolio?<strong> </strong><a href="https://www.knowledgeridge.com/" target="_blank" rel="noopener">Knowledge Ridge</a> is an expert network firm with a strong presence in APAC, EMEA, and the Americas and access to experts in 80+ countries across 158 sub-industries.</p><p>Knowledge Ridge assists clients in navigating an ever-changing global business environment by providing timely access to relevant and actionable industry know-how. We are honored to serve Fortune Global 500 companies, leading strategy consulting firms, and large institutional investors.</p><p class="bbox"><em>Knowledge Ridge has emerged as the expert network of choice for clients across industry sectors and geographies. We have:</em></p><ul><li><em>An industry-leading hit rate of more than 64% for experts (sent vs. engaged)</em></li><li><em>An overall success rate of more than 98% across all expert engagements</em></li><li><em>A client retention rate above 98%.</em></li></ul><p><a href="https://www.knowledgeridge.com/Knowledge-Ridge-Contact" target="_blank" rel="noopener">Reach out</a> to gain relevant insights from seasoned industry professionals who can guide your business towards success.</p><h3><span style="font-size: 14pt;"><strong>Frequently Asked Questions</strong></span></h3><h2><span style="font-size: 14pt;"><strong>Who Uses Expert Networks?</strong></span></h2><p style="text-align: left;">Any organization that needs specific industry expertise and knowledge to help with strategic decision-making, market projections, business restructuring, brand rebuilding, expansion efforts, and more can benefit from consultations with an expert network. Expert network firms&rsquo; clientele may include:</p><ul><li style="text-align: left;">Entrepreneurs exploring and analyzing the market in search of a competitive edge</li><li style="text-align: left;">Marketing teams looking for expert advisors to help craft marketing campaigns and strategies</li><li style="text-align: left;">Private equity firms assessing proposed investments or investigating a market that may impact their investments in the future</li><li style="text-align: left;">Investment management firms, venture capitalists, and hedge funds exploring the potential investment opportunities in previously unexplored markets</li><li style="text-align: left;">Consulting companies trying to understand a particular industry, market, or product, to offer accurate solutions to their clients</li><li style="text-align: left;">IT consulting firms looking for innovative advice on ways to approach the construction of a new tech product</li></ul><p><strong><span style="font-size: 14pt;">What Type of Information Do Investment Firms Seek from Expert Networks?</span></strong></p><p>Investment management firms are looking for quick and accurate answers to challenging industry-specific questions. Experts can provide perspectives and actionable insights with years of industry experience to help organizations identify sound investments and steer clear of loss-making endeavors.</p>