Your commercial and small business bankers love Vertical IQ for call preparation, but the value of Industry Intelligence reaches far beyond these groups. In this seven-part blog series, we will discuss how Industry Intelligence can be utilized by lines of business across your bank enterprise.
>> Related:
Part 1 of 7: Industry Intelligence Offers a Wealth of Treasury Management InsightPart 2 of 7: Industry Intelligence Puts Card Services in Charge
Part 3 of 7: Credit Underwriting Can Connect the Dots with Industry Intelligence
Part 4 of 7: Industry Intelligence Adds Up for Wealth Management & Investments
Part 5 of 7: Get Group Banking on Team Industry Intelligence
When thinking about the value of Industry Intelligence, you may instantly think of your business and commercial banking groups. It’s logical that bankers on those teams, as well as others across your entire bank enterprise, need information on the industries they are calling on. But there’s another, perhaps less obvious group for which such insights are beneficial: private equity.
When making decisions about which businesses to invest in or buy out, your private equity and corporate banking group needs to be armed with the latest data. And objectivity is key.
Industry Intelligence allows these bankers to streamline their underwriting research on fragmented industries’ trends and valuations. It also offers macroeconomic information on worldwide market sizing and potential geographic- or country-specific opportunities.
Let’s delve into ways your private equity team can take advantage of the Industry Intelligence found on Vertical IQ.
Save your private equity team’s time and simplify pre-meeting preparation.
Whether meeting with a startup business seeking funds or a company looking to diversity their investment portfolio, your private equity and corporate banking team needs to be prepared for their calls. Industry Intelligence makes pre-call planning simple and effective, even if you only have a few minutes.
Let’s say the banker is meeting with a startup seeking capital for their solar electric power farm. The Industry Profile will give the banker the in-depth details of how firms within this niche operate, how the industry is structured, and the latest trends. Chapters like Credit Underwriting & Risks, Working Capital, and Business Valuation are especially useful for a conversation like this.
If the banker is pressed for time prior to their meeting, the Call Prep Sheet can save the day. It’s a great way to get up to speed quickly on working capital, industry structure, and the industry’s forecast. For instance, you’ll learn that the average solar power generator employs about 15 workers and generates about $10 million annually. The Call Prep Sheet even includes three Call Prep Questions to get the conversation started.
Streamline the ability to research fragmented industries where information is otherwise difficult to synthesize.
The private equity group has to do their homework and do it well or the bank and its investors could lose money (and lots of it). But researching highly fragmented industries can be challenging. There are so many disparate parts to digest in order to understand the industry. Industry Intelligence allows the private equity team to objectively analyze a deal, looking at the commonalities within an industry as well as an individual business’s unique aspects.
As an example, if your bank is considering investing in a medical and imaging lab company, there is a lot you can learn from the Industry Profile. For instance, looking at the Industry Trends, we find that some of the top issues that could impact the desirability of investing in a medical and imaging lab company include:
- Rapid developments in medical and imaging lab technology have resulted in tests and procedures that are faster, more accurate, and less invasive, resulting in an overall reduction in health care costs.
- The growing health care needs of the aging U.S. population should increase demand for medical and imaging lab services.
- Information systems for medical and imaging labs are becoming more sophisticated and offer more features, which helps labs operate more efficiently and reduce costs.
- The use of MRI, CT, and PET scans is increasing. While more costly, these modalities deliver superior image quality which facilitate more accurate diagnoses.
The Business Valuations and Financial Benchmarks chapters of the Industry Profile also provide helpful insights into how a particular business stacks up against their industry peers. That’s useful to both the bank, investors, and the business owner.
Evaluate worldwide market sizing and geographic- or country-specific opportunities.
It’s important to understand the growth opportunities for a company, not only here in the U.S. but potentially abroad as well. Using the Global Perspective chapter of the Industry Profile gives your private equity team that bigger picture view of a prospect’s expansion potential.
Looking at the Global Perspective chapter of the Industry Profile for Soap and Toilet Preparation Manufacturing, for example, we learn that brands continue to look outside mature markets in North America and Western Europe for growth. Led by China, Asia-Pacific is the fastest-growing regional market. Vietnam and India are also top targets for growth as large numbers of millennials throughout Asia drive demand for personal care products. In fact, Asia-Pacific accounts for about a third of the global soap and detergent market, according to The Business Research Company.
From this Global Perspective chapter, we also learn that consumers’ overall shift toward e-commerce during the pandemic has held true for the soap and personal care markets too. This could be valuable information for your private equity or corporate banking team to know as they assess the growth potential for a business within this niche.
Build your bank’s equity too
Industry Intelligence can be a tremendous time-saver while also offering your private equity and corporate banking team the insights they need to make informed decisions about prospective investment opportunities.
And don’t forget to seize the chance to make a lasting impression on business owners. After all, there can be more and bigger business coming your way when their company grows. For instance, private equity/corporate bankers can print and share an article from the Industry News chapter of their client’s or prospect’s industry. It’s a simple but powerful business development resource!
Vertical IQ can help teams across your bank save time, make more informed business decisions, and close more deals. Contact Vertical IQ today to learn more about our value-added enterprise solutions!
Image credit: Visual Stories || Micheile via Unsplash