Issue 2 2019

54 Acquisition International - Issue 2 2019 Many industries, from finance to construction and beyond face changes over the coming years, and as such many need to embrace technology to help push them through, as Staff Writer Hannah Stevenson highlights. ith technology enjoying an increasing presence throughout the corporate landscape, many industry experts from across the space are urging firms to embrace change in order to adapt and ensure their ongoing survival. Recent research has shown that this phenomenon is only growing, with new research showing that over 90% of private equity firms believe that AI will disrupt their sector by 2024. The research was conducted by Intertrust, a global leader in providing expert administrative services to clients operating and investing in the international business environment. According to the research, private equity firms are acutely aware of the impact digital innovation will have on their sector, particularly in the areas of Artificial Intelligence (AI) and blockchain. The firm interviewed private equity professionals across Europe, North America, the Middle East and Asia to identify the value-add delivered by new technologies now and in the future. Over 90% believe AI is likely to have the biggest transformational impact on the sector. This is almost a fifth higher than the industry average of 77%. Over a third (37%) of respondents to the survey said that blockchain, AI and robotics are already being adopted in the industry and will become more widespread in the near future. Meanwhile, 56% of respondents believe digital innovation is currently having the biggest impact on the back office, by generating greater operational efficiencies and 37% say innovative technology is also being deployed to speed up the due diligence process when completing transactions. Michael Johnson, Director of Fund Services, Intertrust, commented on the findings and how they will affect the private equity market moving forward. “The findings of our survey reflect growing levels of interest in using AI for handling large volumes of investor queries more efficiently by recognising questions being asked and recommending responses. This will also introduce more standardized responses, further reducing risk. Additionally, there is likely to be an emerging desire for firms to favour the use of blockchain for KYC-related activities. “Over the next five years there is set to be huge demand for new Regtech solutions, which is recognised by nearly half of all respondents. New Regtech solutions bring previously unforeseen levels of automation to the regulatory compliance process, including reporting and monitoring. Often provided as a software as a service (SaaS) model, Regtech solutions are designed to boost transparency and support compliance with regulation such as KYC.” Technology Key Focus As Industries Face Change It is not only experts in the private equity space who are calling for firms to embrace technology to battle change, with a new white paper from Smarter Grid Solutions urging distribution utilities to adopt new technologies and new ways of thinking to slash the cost of integrating renewable energy generators, electric vehicles and other distributed energy resources (DER) into their grids. As DNOs accelerate their transition to become distribution system operators (DSOs), the report concludes that utility companies should begin implementing distributed energy resourcemanagement systems (DERMS) immediately to save money and meet decarbonisation targets, while also continuing to meet the needs of their increasingly sophisticated and active customers. The company’s experts identify that the policies and practices used by the transmission system operators (TSOs) to manage their networks cannot simply be copied across to the distribution grid. The transmission networks are operated using well-established and accurate mathematical models and have monitoring systems in place, along with a high degree of redundancy, multiple layers of security and a common set of price signals to operate the market. In contrast, distribution networks have a much larger number of connections and are not commonly monitored and controlled autonomously in real-time. The amount of electricity flowing into and out of the distribution system is now changing rapidly with DER often clustering in localised areas, causing issues for individual substations. Smarter Grid Solutions’ white paper highlights the need for DERMS to help manage these increasingly complex systems. The Glasgow- based software company is already working with four of the six distribution utilities in Great Britain and has connected more than 350MW of generation capacity to distribution grids, as well as saving its clients more than £175 million in costs. Bob Currie, Chief Technology Officer at Smarter Grid Solutions and the author of the white paper, explored the issues in his paper and how firms needed to be flexible to adapt around them. “The number of electric vehicles, solar panels, batteries and other DER being connected to the grid is going to rocket from tens of thousands at present to millions within the next decade, so now is the right time to invest in the right systems. “Utility companies need to implement DERMS because distribution networks aren’t the same as transmission networks. W