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Executive interview: Chris Conradi, chief digital officer, FSN Capital
Chris Conradi is taking his learnings at Google into the private equity industry at Norway’s FSN Capital
After a Google brainwash, Chris Conradi is on a mission to transform a sector yet to realise the benefits of the latest digital technologies.
Conradi left Google in 2019 to work at Norwegian private equity investment company FSN Capital and quickly found out that the “very conservative” private equity sector was behind on digitisation, particularly in comparison with companies in other parts of the finance sector.
But he is changing this at FSN Capital, a company present across the Nordic region as well as in Germany, which invests in businesses to help them improve, before selling them to make money for investors.
It might seem a stretch to take a company with a small IT team to the levels of Google, but by changing FSN’s cultural attitude to IT, Conradi is putting the company on its digitisation journey and bringing “some flavour and spice to the mix”.
“With Google, you always have access to the best technologies, but to be honest that stuff is all available now,” he tells Computer Weekly. “The main thing that came from my Google background is the culture piece and the whole notion of failing fast and testing things.”
Conradi says cultural change in any company’s IT department begins with the people recruited, which is the first challenge. “You try to find good technical people and you can find them, but the hard part is to find the technical people who also have the social skills,” he says.
“We want people who are outgoing, outspoken and external-facing who also have the technical background – and that is super hard to do.”
Conradi began his journey to acquire all these skills when he studied computer engineering in Norway and followed that with a master’s degree in business and IT in Australia, before starting his first job as a trainee at IBM.
In 2015, he embarked on a new period of learning after Google called him to see if he wanted to help establish its cloud office in the Nordics. He agreed and spent four years building Google Cloud for the Norwegian market.
“The private equity industry and wider investment industry are a bit behind other sectors in digitisation. They are very conservative”
Chris Conradi, FSN Capital
Conradi left Google to join FSN Capital, with a fresh canvas in terms of digital transformation. “The private equity industry and wider investment industry are a bit behind other sectors in digitisation,” he says. “They are very conservative.”
This meant that in the early days, Conradi had to start from ground level and lay the foundations for digital transformation.
“Coming in, it was about getting my hands dirty and getting us to where I feel comfortable,” he says. “The first couple of years were about moving to the cloud, security and to give us the foundation for a modern operating company. That is now done.”
Part of this has seen FSN Capital outsource its operational IT to enable Conradi to focus on tech that improves business, with a team of two data scientists, a data engineer, two developers, a project manager and Conradi himself.
It is this team that focuses on tech to improve FSN Capital’s business performance – and data is central to what it does.
Conradi and his team have two customer groups. “I work to improve the companies we own, running projects and exploiting data to get insights, so in effect they are my customers,” he says. “I leave the operational IT to them, but I give advice on direction and strategy.
Massive data platform
“On the other hand, my customers are internal and I try to predict which companies are good investments and which they should shy away from. We are building a massive data platform for this and my customers are our investment team.”
After getting the foundations laid for FSN Capital to start using advanced technology, which took about two years, Conradi and his team began a data platform journey with the aim of improving the decisions the company makes about which companies to invest in.
“We are trying to make investments in the multi-million-euro range and I want us to have better data quality when making investment decisions,” he says. “You have to marry the art of investing with data. You can collect the normal structured data from the likes of Bloomberg, but everyone in the industry is trying to do this, so it doesn’t really give you an edge, it gives you access to information, but doesn’t give you anything new.”
Conradi says the company uses the same sources of data as everyone else because it has to, but is trying to combine that with alternative data sources, such as imagery and other unstructured data. “When you start doing that, you can get knowledge or insights that nobody else has,” he adds.
FSN Capital is currently launching the first version of a platform, known as Core, which is used for predicting good investments.
The biggest challenge is the data quality, says Conradi – you can get access to data, but it is often poor quality.
Taxonomies can be problematic, for example. “The first thing we look at is which market companies are in, to see if it is a growing industry, because if it is, that is a good start,” he says. “One of the problems is, if you look at how companies are sorted, the taxonomy of doing this today is not one standard and the databases out there are all pretty bad.”
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A big challenge for FSN Capital is to automatically classify companies through a tagging system. “When you do that and you do it correctly, you can define your own industries and you can see more quickly which industries are growing, building factories and hiring people. Other companies will not be able to see this,” says Conradi.
Although FSN Capital might be in a sector that finds itself playing digital catch-up, it is based in a geographical region that is leading the way.
Being in the Nordics is an advantage, says Conradi. “Being based in the Nordics helps us. It gives us a different flavour and it also gives us some credibility when recruiting – we talk about the values we live by to make the world a better place.”
Conradi believes the private equity industry could also help itself if companies were to collaborate more. Unlike the banking sector, where banks often share and develop technology jointly, there is nothing like that in private equity, he says.
Collaboration desperately needed
Conradi cites cyber security as an example, where serious improvement and collaboration are desperately needed. “As an industry, private equity has to wake up because it doesn’t take cyber security seriously enough,” he says. “I am pushing this hard, but I can’t do it alone.
“People have the view that ‘it doesn’t happen to me’ until it does. There is a lack of knowledge and it is easier to shy away from it than get up to speed.”
One example of where collaboration could help reduce security incidents is in sharing experiences, he says, but this is not easy in an industry where collaborating with competitors is an alien concept.
“Most problems are caused by social engineering, so I think there needs to be more openness,” says Conradi. “It is OK to admit if you make a mistake. If something happened to us, I would share that with my peers so that it doesn’t happen to them. If you think this will not happen to you and you don’t share, you are not doing yourself a favour.”
Conradi adds that private equity companies should also collaborate with cyber security firms.
