Companies that develop innovations in their industry are usually the ones that become very successful. HGGC is a great example of this. The Palo Alto private equity firm has changed the game in the investing world since the company first burst onto the scene in 2007. There are a number of key reasons why the company has achieved such monumental success in a relatively short time span. It is true that they have very experienced leadership from top to bottom. The people who are in charge of making key decisions at the company have been making investments for decades. However, the innovations that HGGC has introduced have totally changed the way that firms do their investing around the world.
The main innovation that the company is credited with is the use of algorithms as a tool to analyze the feasibility of potential investments. In the old days, there were many people who went solely by their own gut instincts when they were trying to decide what to invest in. Those days are gone forever. HGGC has developed very sophisticated algorithms that are capable of looking at many different aspects of an investment opportunity and weighing the risks and rewards. This data can then be taken into account by the people who make the final decisions. This data provided by the algorithms is responsible for helping the company make countless great investment decisions. Likewise, it has also helped them to avoid foolishly throwing their money away on bad investments that would have been a disaster.
Computers had been used in investing to varying degrees for many years. However, HGGC was the private equity firm that figured out that computers could become an integral part of investing decisions. In the process, they influenced countless companies around the world to do the same thing. This has resulted in investment companies being reliant on algorithms to determine their investments. It has taken the human element out of the investing process. These algorithms can carefully analyze all of the data about a potential investment without human emotion getting in the way. This is one of the main reasons why HGGC has done better than their competition.