We Are Enabling Private Markets To Embrace Change And Be Future-Ready: Co-Founder, Oxane Partners

We are at the prime of digitalization. With the surge in digital adoption in the post-pandemic world, the amount of unstructured data is increasing multi-fold. Managing this data efficiently has become imperative for organizations for their long-term success and growth strategy. To know more about how Oxane Partners is solving the complex data challenges in the private markets industry, we had an interesting chat with Vishal Soni, Co-Founder & Managing Director of Oxane Partners.

What was the vision of Oxane Partners?

We started with the vision to simplify the complexities in private market investments through digitalization. Having a decade of investment experience working as a credit trader with Deutsche Bank London, we grappled with first-hand challenges in the private investment space. Back then, there was minimal use of technology in private markets and we capitalized on the opportunity by strengthening the tech ecosystem and bridging the technology gap in the private markets. Since setting up our shop in 2013, we are enabling the private markets industry to embrace change and be better prepared for the future.

Describe the journey of Oxane Partners.

We started small, 8 years ago, working within our network of known banks and funds, where we did financial modeling and transaction advisory with the help of complex excel models. As we grew from the ground up, we realized that there was a huge demand for portfolio management and risk management solutions owing to the data complexities and bespoke nature of private markets investments. Since then, we have come a long way to add portfolio management technology, risk monitoring, managed-data services, loan servicing, and independent valuations to become a full-suite solutions provider to the private markets.

Moreover, we provide an exceptional combination of asset-class expertise and robust technology platform, which not only helps investment managers enhance their productivity but also helps them optimize overall costs. This gives the managers the critical ability to scale their businesses with a renewed focus on their investment strategies.

How do you maintain accuracy in Portfolio Management?

Traditionally, the portfolio managers were using Excel-based make-shift solutions which involved a huge amount of manual work. The testing and validating of the portfolio data was a cumbersome and time-consuming process. 

That’s where our team of domain experts comes to the rescue and ensures the utmost level of data quality by having complete ownership of data. Our team is adept with the full spectrum of data management services including data extraction, normalization, and transformation, providing a strategic data validation layer that helps in data standardization across all the asset types. This helps us to deliver timely, accurate, and actionable data insights to portfolio managers.

Describe in brief the valuations process of illiquid assets.

We have a robust valuation process for illiquid assets having vast coverage over structured credit space. Our valuation process involves a massive amount of data handling and technology use that helps us in benchmarking valuations, mark-to-model exercises, scenario analysis, and so on. Our unique combination of robust technology and dedicated domain expertise enables us to value hard-to-value assets with exposure to multiple currencies and complex waterfall structures.

How is the recession impacting the valuation of Asset Classes?

One of the most noticeable characteristics of a recession for investors is a decline in asset valuations, including stocks. Before and during a recession, you're likely to notice a decline in the value of your investments as a result of a business slowdown and an overall lack of confidence in the economy. 

The central banks are raising rates aggressively to try to control inflation, which is leading to large declines in the stock market and a sharp decline in home construction and sales. Higher borrowing costs mean that there will be slower spending by consumers, reduced investment by businesses, and, eventually, slower hiring and more layoffs; all signaling an economic downturn. The above indicators are hinting towards that we may be already facing recessionary headwinds.

How do you see India’s startup growth story?

Being home to over one hundred unicorns with a total value of USD 250 billion, India is now recognized as the 3rd largest startup ecosystem in the world. Although the startup boom in India is impressive, I have a different view of the recent valuations of the startups. No doubt, some unicorns have great startup ideas but the huge valuations are not justified because of a lack of scalability and profitability in the long run. A lot of them are overvalued and we have seen many startups’ valuations eroding when they go public. 

Moreover, with the funding winter setting in and companies across several verticals witnessing funding crunch, startups in India are also employing extensive cost-cutting measures, the most prominent of which are downsizing. It is high time for startups to leverage this downtime to pivot and scale. Lastly, the startups that embrace innovation, achieve product-market fit early on, and have the ability to scale are likely to thrive and attract investors even through the harshest of the funding winters.