New York investment firm giving members access to private market opportunities across private equity, private credit, real estate and niche strategies.
Industry
Finance
Use Case
Deal screening and investment memos
Company size
40+ employees
Headquarters
New York, US
Knowledge work automation
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About
10 East is a New York based investment firm that gives its members access to private market opportunities across private equity, private credit, real estate and niche strategies. Founded by Michael Leffell, the firm works with individual investors, small family offices and other clients, and has more than $1.8 billion of invested capital.
The firm has grown quickly over the last four to five years. Louis Mayer, a Managing Director who has been at 10 East for about four and a half years, describes the response as deliberate: adopt technology that lets the firm scale its operations without adding cost at the same rate.
“We’ve tried to be incredibly tech forward and thoughtful about how we implement technology in our workflows,” he says. On the investment team specifically, that means asking which of the most repetitive tasks in a process can be handled by software, from deal sourcing and initial evaluation through to investment memos and post investment reporting.
The challenge
10 East reviews hundreds of private market deals a year, at a rate of 10 to 15 new opportunities a week. Each one needs a short, high level overview before the team can discuss it properly.
Producing one of those overviews took an analyst one to two hours: read the incoming materials, build the template, populate it, refine it, review it, and have it ready for a conversation with the broader team. At 10 to 15 deals a week, that is a large share of the investment team’s capacity spent assembling information rather than judging it.
The same shape of problem sat further down the process. Once a deal is approved for full diligence, 10 East produces a 25 to 35 page investment memo. Parts of that document require full human underwriting and always will, including the deep dive work. Other parts are repetitive: management bios in a house style, firm overviews drawn from input materials or public sources, the standing scaffolding of the document itself.
“All of those things, they take our team members quite a bit of time,” Mayer says. “All of that is time savings that can be harvested and repurposed for better use on higher value tasks.”
After an investment closes, the firm reports quarterly on 300 active line items in its portfolio. Similar style inputs, similar style outputs, every quarter, and historically no good way to automate them.
“There is no really good way to automate that historically, because it required more human style judgment, and so it couldn’t be directly templated,” Mayer says.
The solution
10 East uses V7 Go across its investment process, from the top of the funnel through to post investment reporting.
At the screening stage, V7 Go produces the first pass review on incoming deals so the team walks into a discussion with standardised materials rather than a stack of raw documents. At the memo stage, the repetitive sections of the 25 to 35 page investment memo are templated and populated from the input materials. For quarterly reporting, the same approach transposes each position’s inputs into the firm’s own output template in the right style.
Human review sits in every step. “Those always have human review and are augmented by our team,” Mayer says. What changes is where the team’s hours go.
The investment team were the early adopters. 10 East is now extending the workflows to legal, compliance, finance, operations and client service. One of those was built in house: Mayer built an NDA review workflow himself, encoding the firm’s standard positions on what it will and will not accept in a redline, and having the output propose the changes.
“I was actually able to build that myself with no coding skills whatsoever,” he says.
The results
A preliminary investment overview that took an analyst one to two hours now takes about 20 minutes of human time, a 60 to 70% reduction on each one. At 10 to 15 new deals a week, that is capacity returned to the investment team every week of the year, and quarterly reporting on 300 active positions shows a similar saving.
“So we can cover a lot more ground with a lot less time and harvest those resources for better use,” Mayer says.
The sharpest illustration is a single transaction. 10 East had roughly six days to go from first hearing about the deal to making an investment decision and collecting commitments.
“That would quite literally not have been possible before we had access to these AI tools, because it would have taken us far too long to adjust the materials that we received and create the Investment Committee materials we needed in order to approve a transaction,” Mayer says.
Testimonial
Louis Mayer
Managing Director at 10 East
Three things decided it, in order.
Compliance and confidentiality. As an SEC registered firm, 10 East needed assurance that the underlying models are not training on its data and that the information it works with is kept secure and confidential. “Compliance and confidentiality are two of the most important things that we have to look for when we are evaluating a solution,” Mayer says.
Auditability. Every value in an output traces back to the source document it came from. 10 East worked with V7 to add custom footnotes to its generated documents: a tag back to the underlying source, both static in the document and live, so a reviewer can click straight through to the exact place a figure came from.
“If you can’t source the data back to their root source data, you can’t believe any of it,” Mayer says. “That creates an audit trail that we would not be able to function without.”
A partner, not a toolkit. 10 East is a firm of investors rather than engineers. “We are not technologists, we are investors, and so we are not here to be coding our own solutions,” Mayer says. “We needed a partner who could work with us, understand our needs, and develop alongside us to create customized solutions on our behalf, rather than just handing us a blank toolkit and saying, figure it out.”
