The Challenge
The coronavirus pandemic has had a catastrophic impact on businesses. A rise in disrupted businesses, distressed assets, mounting losses, broken supply chains, and increased need for financing have created a plethora of opportunities for financial and restructuring advisory firms. However, these firms are suffering from a problem of plenty. An information overflow is impeding their ability to sift through data to find relevant opportunities, track hidden gems in niche sectors, and stay ahead of competitors by ensuring effective and efficient time-to-market.
A mid-tier corporate finance and restructuring advisory firm focused on the UK market was also facing these challenges. The client reached out to Evalueserve with the following requirements:
- Track firms at an early stage of distress to position itself as an end-to-end strategic business partner with a full range of service offerings, from pre-to-post insolvency.
- Gather and track quality leads among small-to-mid market firms and uncover hidden opportunities in an ecosystem / value chain not targeted by large global consulting, law, and tier 1 restructuring firms.
- Track leads that are more likely to materialize, especially in view of the UK government’s support measures such as job-retention schemes, temporary moratorium on winding-up petitions, and business eviction, which are likely to taper off in H2 2020.
Our Solution
To address the client’s complex needs, we proposed Insightsfirst Opportunity Radar. This robust solution identifies companies exhibiting early signs of distress and provides periodic updates on them. Opportunity Radar is highly customizable to clients’ needs and integrates recurring data updates from multiple sources, such as Factiva, LexisNexis, websites, and third-party sources, which focus extensively on distressed companies (such as Beard Group).
Opportunity Radar identifies opportunities using our mind+machine™ approach, as detailed below:
Machine: Specific distress-related triggers are fed into the AI-powered platform, which scans the Web and tags results into categories. The platform also integrates relevant information through APIs after thorough screening of data sourced from our partner database providers.
Mind: Our team of analysts curate the data received from third-party sources, feed ‘positive results’ into the AI engine and send back ‘negative results’ for sustained learning. Highly contextualized keywords are used to remove false results and eliminate irrelevant opportunities, such as:
- Firms that have already appointed advisors
- Large conglomerates that can weather temporary distress
Trigger-based approach
We include triggers such as restructuring, rating decline, layoffs, closure, downsizing, loss / deficit, cutbacks, WARN notice default, debt at deep discount, covenant problems, and distressed exchange offer, among others. These triggers identify companies at all stages of distress, right from those witnessing underperformances in quarterly results to those facing problems in servicing debt, or are considering Company Voluntary Arrangement.
Client focus at the center
Our data sources are well-equipped to capture small and midsized firms (revenue GBP2–100 million or 50–500 employees) to uncover hidden opportunities. Our back-end AI engine filters out firms that have already undertaken restructuring or engaged a turnaround advisor.
Features such as ‘Ask the Analyst’ allow clients to request bespoke research, including deep-dive company profiles, executive biographies, and industry reports. Additionally, the ‘in-platform newsletter generation’ feature allows a wider audience within the firm to remain updated on opportunities.
Business Impact
Reduced time-to-market: The client’s time-to-market reduced by 35% as they could identify relevant opportunities faster, and with less effort.
3X improvement in lead identification: Opportunity Radar was not only used to identify but also validate and support the client’s existing opportunity mining programs. It improved the client’s net output of relevant opportunities by about 3X.
Improved conversion rate: Increased lead conversion by 60%, with insights related to opportunities at every stage of lead development and highly differentiated and actionable insights using the “Ask the Analyst” feature.
Time-to-market reduced by 35%
as the client could identify opportunities faster with less effort.
3X improvement in lead identification
since the client can identify, validate, and support existing programs.
Increased lead conversion by 60%
with insights related to opportunities at every stage of lead development.