Podcasts  •  July 29, 2022

EMEA and Key Opportunities Around VDR with Anthony Sharratt, DFIN's Head of Venue, EMEA

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The Insider by DFIN" is a series of video interviews featuring the latest trends, topics and key perspectives on the global capital markets.

Join DFIN's Head of Venue, EMEA, Anthony Sharratt, as he discusses the key opportunities around virtual data rooms and how Venue can accelerate your operations in this special podcast edition of The Insider by DFIN.

Dana Barrett - Welcome to the Insider by DFIN. I'm Dana Barrett and I'm joined this afternoon by Anthony Sharratt, who is the Head of Venue, EMEA. Good to see you.

Anthony Sharratt - Hi, nice to meet you too.

Dana Barrett - Glad to have you here. We have a lot to talk about. Before we get started though, I want to understand a little bit more about your background. Where did you come from? How did you get into this world of virtual data rooms and how did you come to be in this role at DFIN?

Anthony Sharratt - Okay. Well, I'm a lifer, I'm a DFIN lifer.

Dana Barrett - You are?

Anthony Sharratt - Pretty much. Well, I say that, I've been here for 23 years. So I started in financial printing business, which is still a huge part of what RR Donnelley does. What we call global capital markets, they sort out the prints. So taking care of the prospectuses, the shareholder communications, those kind of things, again, for Europe. So I was in sales for many years doing that, and I've also been involved with other special projects around sort of outsourcing cumbersome solutions. So we had a captive in India, so we bought a company called Office Tiger, this was way back, and I spent some time out there looking into how we could use those sort of data mining resources to potentially sell into private equity and banks. So I spent some time doing that. So my whole career has been within the sales environment within DFIN, or RR Donnelley, as it was back then. And so, moved into the sort of sales, senior sales role into Venue, our data room product in 2014, and I'm obviously still there now and I just look after a great sales team in Europe. It's an exciting place to be right now.

Dana Barrett - How different is the, is the product need different in Europe than it is in the US? I mean, I know there's different requirements. For example, I know we, in the US, have very little, as it relates to data privacy, and you, in Europe and beyond, have much more of that. So how different does that make your job and the product?

Anthony Sharratt - Well, I think it's, there are lots of similarities, of course, and I think, we have one product that serves all those markets. But there are so many nuances around sort of what we do in Europe. So working with a banker or a corporate in France is definitely nuanced to what we do in Germany or the UK or the Netherlands or anywhere else. So we're talking about cultural ways of doing deals. So everyone does deals, everyone does deals, but there are different ways and different expectations around those deals, coupled with, obviously, the regulatory side of things. That makes things very very interesting. So it's quite diverse, and so where, obviously, the difference, main difference between us and the US is that the US is pretty much a cookie cutter approach to most deals. The US just has scale. We don't have as much scale as the US does. Anywhere, probably 10% of their kind of, the overall sort of business, if you want, if you will. But yeah, deals are smaller than they are, obviously, in the US, but it's, yeah, it's very different across different countries. So the challenges are making sure that you have native speaking Germans talking to German clients, and same for France, and now, obviously, the same for the Netherlands.

Dana Barrett - Yeah, very interesting. So obviously, you and I have talked about the fact that virtual data rooms have been around for a long time.

Anthony Sharratt - Yep.

Dana Barrett - But historically, before that,

Anthony Sharratt - Right.

Dana Barrett - How was M&A done? All paper, faxing back and forth, mailing things back and forth, and that was the way it went?

Anthony Sharratt - Yeah, hugely cumbersome. I mean, the data room was really invented because, or created, just to sort of negate that whole kind of walking into a room with 150 lever arch file boxes with just papers stacked in them. You ever try to find something at the bottom of a box, right? Looking at your photos at home, try to find those. So the whole point was that, yeah, they, that's, you have a security guard standing outside the door and you'd have 15 minutes to go in, or an hour or whatever it is, to go in and try to gather as much information from that data as possible. I think the world came to the idea that there's a thing called technology out there that might be able to throw a bit of a solution to this. So that's how they were kind of formed. But they are so much more now. They were just a, literally a storage kind of facility, but now, the technology, the ability to be able to audit things and to track and to control has all kind of been born out, really, of the fact that the data room was invented in the first place. No one could conceive those kind of, the potential of data rooms when they were created.

Dana Barrett - Right, at first, it was just a digital place to store things, and then it became a digital place to share and store things.

Anthony Sharratt - And more.

Dana Barrett - And collaborate and all of the things, right? And now, and of course, the security has always been hugely important, but I feel like the more sophisticated the hackers get and the bad guys get, the more sophisticated the security has to be.

Anthony Sharratt - Totally. I mean, I guess cyber security is a real threat. It's a real threat and that's why we're seeing CSOs creeping up into businesses now. There's lots and lots of people who are, actually their job is to make sure that we do stay safe, so any kind of technology they're using has to stand up to that kind of scrutiny. So we satisfy a lot of those with our credentials. We are, from a European standpoint, ISO 2701. From a US point, it's 8T101 SAS 70 level two. So these are industry standards around protecting the data, but also the processes that go with that data, because, as we all know, where do these security breaches come from? It's not a computer creating that kind of opportunity. It's a human being seizing the opportunity to do it, so you going to protect the processes, as well as the infrastructure that supports that data.

Dana Barrett - Yeah, I mean, we've all, I think, heard the horror story of the CEO who gets an email asking for XYZ and he responds and he's actually responding to a hacker, it's a phishing scam of some sort, and it's the big boss himself that doesn't understand all the things his employees have been taught to look out for. He didn't go to the training and he sends the bad email and doomsday, right?

Anthony Sharratt - Correct. Well, yeah, I mean, they're, I think, systemically, really, within someone like DFIN, the culture is so important. So we have people creating sort of dummy phishing attempts on a very regular basis, sort of sending it out there. So what you're doing is instilling into the culture in your business that this is a threat. Because normally you hear about threat and you think, oh, that happens to someone else.

Dana Barrett - Right.

Anthony Sharratt - It never happens to us, right?

Dana Barrett - Right.

Anthony Sharratt - So yeah, we've gone at great lengths to build the culture within DFIN to be able to make sure that all of our employees, they know. They know about this stuff, right? And so there's training. If someone accidentally, and it's, like you said, CFOs do this, CEOs does this.

Dana Barrett - Well because you, this is how smart they've gotten. They make these things look really good, they make them look like they're from someone you know and you think, oh, well this one time. I know that's from Joe, I can just go ahead and click on it or I can fill that form out, and no.

Anthony Sharratt - Yeah, and at the pace at which everyone works, it's, there's this urgency about everything that we do, because it is. The people that we serve in the banks, the corporates and the lawyers, they're working up against the clock the whole time, so there is this, there's this, yeah, there's a need for expediency in what we do. So, but there's also now, there's added kind of concern of, are we tripping over ourselves here? So yeah, my advice always to people is just take your time. Take your time. Just think this thing through. Don't respond until you know it's absolutely safe to do so.

Dana Barrett - Yeah, I mean, we were talking with Guardum with Data Protect recently, and everything they're doing. People think that if they're using a PDF and blacking something out, they've done their job in redaction, but that's not real redaction, we know now, because hackers can kind of uncover that layer and still see the data. So clearly there's so much more to all of this than was thought of when virtual data room was just being created to store things.

Anthony Sharratt - I think that's absolutely right, yeah.

Dana Barrett - So I think it's good that we kind of went through the history, Anthony, of paper, all the boxes in a room to this virtual data room that's just, it's secure and it's a place to put things, to where we are now where you put things, you collaborate, there's tools that work coherently with the data room.

Anthony Sharratt - Including the Data Protect services
that you were talking to Darren Ray about, I'm sure.

Dana Barrett - Yeah yeah, exactly, to Darren. I couldn't come up with Darren's name, so thank you.

Anthony Sharratt - No, it's fine, it's fine.

Dana Barrett - It was right there. But where's this going? What do you, let's have some fun and put on our genie hats and get the crystal ball out, because where do you see this going, this technology for the virtual data room?

Anthony Sharratt - I think, that's a really good point. I think we need to be creative about that, so there's no really kind of right or wrong answer to this. I mean, we still have to remain super super secure, and as you say, there's people who are getting very smart, so we need to make sure that we're on top of that kind of stuff. But where I think this is going and where it needs to go for us to be relevant and to take it to the next level is data rooms need to develop this sort of, that sort of cognitive functionality. The using, really using AI to help with either predicting certain sort of behaviors or being able to report upon things sort of very efficiently so that people can, they don't have to then take the data that we produce and then have to do something with it. So a good example would be, an investment banker would be working on an M&A transaction, doing the due diligence process. His MD will say, right, extract out all of the activity data within that data room and tell me who's really engaged with this process, so that we can then get more targeted amount of data that we provide at latter stages of that process.

Dana Barrett - Interesting.

Anthony Sharratt - So currently, what happens is, we provide some excellent reports, but it's never quite like the, what the kind of the bankers actually need. They'll spend three hours probably taking that data, extracting our very good data and then sort of re-orientating it or structuring it in a way which is meaningful to them.

Dana Barrett - Right.

Anthony Sharratt - So why don't we do that? Why don't we just look, why don't we build something that helps them to get exactly what they need? We're saving them time, because I think we become more valid as time goes by, as people get used to the technology. But having something like that will definitely enhance the process for them. So it's about, yeah, it's about helping workflow, right? Smoothing out workflow, making workflow more efficient.

Dana Barrett - Right, so the outcomes that the users are looking for is not just to store data anymore, but now I need to be able to search through it, to sort through it, to format it the way I want, to showcase it in the way I want, to learn from it, and there's where all those machine learning and AI tools can come in.

Anthony Sharratt - Absolutely.

Dana Barrett - Do those potentially, I guess you won't know until you know, but we're pretending. We've got our crystal ball. So do those potentially open up other data privacy or data security issues?

Anthony Sharratt - It's a really good question, and I'm trying to answer it as accurate as I possibly can, because this technology exists in different components in different products that we have. So at the moment, with the data room, it's standalone, it plugs into some of our other technology, but some of what we're asking it, what we're planning to do, exists in other bits of our, in other software areas within the business. So that, what we're talking about, is just getting smarter about bringing that data and sort of embedding it, that sort of software, embedding it into the sort of the data room. So, and then from a security point of view, we're never going to make any compromises on our security.

Dana Barrett - Right, well I would imagine, based on what you just said, if other of the tools that already exist in DFIN and that are constantly being, growing and improving and adding functionality and all that, when they get into or really get connected to the virtual data rooms, that they automatically get a layer of security that the virtual data room already has.

Anthony Sharratt - You know what's really interesting, when they came up with the name Venue for our virtual data room, I thought, my goodness, what is that all about, right? It doesn't really make any sense to me, Venue? But as time sort of rolls on, and it's relevant now, is that Venue becomes the space where all of these, where everyone comes into, and all these other technologies are built into Venue or plugged into Venue, but we actually use the security infrastructure, the Venue support, for that purpose. So it's actually becoming more relevant now, so I'm kind of eating my words a bit.

Dana Barrett - It's kind of funny that you say that, Anthony, because I obviously come to this much later, I'm just learning about it in the last little while, and it made sense to me right away, which is funny.

Anthony Sharratt - Really?

Dana Barrett - Which is funny, yeah, because it seemed like, well this is the place where everything is happening.

Anthony Sharratt - Yeah.

Dana Barrett - It's not just a storage room now, right? I mean, if you even just think about what's happening in a facility, in a hotel, right? They've got storage rooms and then they have venues where things happen. Well now, these are combined in this product, right? You store things there, but it's also where everything is happening.

Anthony Sharratt - Yeah, correct. I think we've got some great people within our digital sort of channel now as well, making sure that that brand is something that people kind of recognize. So it's, yeah, I mean, I couldn't agree more.

Dana Barrett - Yeah, so okay, so we're looking at potentially, so I guess, like everything else, as DFIN's evolving all of their products, the focus is on, what are the customer needs, what are the outcomes they're looking for? They want to save time, they want to make sure they're 100% accurate. These are regulatory documents, they have to be right, and they want to make sure that when a change happens, everybody who needs to know knows and that all the right actions are taken. And they also wanna be able to present their data, not only to the regulatory bodies, but to all the stakeholders.

Anthony Sharratt - Sure, absolutely.

Dana Barrett - So how does all this happen with Venue sort of being at the center of it, right?

Anthony Sharratt - Yeah, I mean, the way that Venue or the data rooms have evolved, specifically Venue, is that, yeah, it has a full audit trail capability built into the data room, so every click and every touch that's ever, that ever gets input into Venue is recorded. So we already know what people are doing and can report back on that, and that's, obviously, I've heard of specific instances where in a court of law, when there's potential sort of trials after an M&A sort of process, that our data is actually admissible in court as proof. You're a disgruntled kind of investor who missed on buying this super super super, or buying into the super super business, and then they said, well we never had access to this. We're able to go back and say, well actually, I'm really sorry but you did have access to this, and by the way, you accessed it on 3:45 on a Friday, and then when we updated the documentation, you also saw that. So what is it you're actually looking at? So look, that element of it is there.

Dana Barrett - Right.

Anthony Sharratt - But when we start talking about the regulatory aspects, so ESG is something that everyone is focused on, and if they're not, they should be. But believe me, there's a lot of noise about this, and it's, you have to take this seriously. And obviously there's not, Venue helps with the environment because it literally, it's something that people can literally sort of plug into, it's remote, they don't have to visit. Don't have to jump on planes now and go and do deals across the pond. They can actually do it very easily online. The social side of things, not so sure, but certainly from the governance. So getting back to the “G” in ESG is what it's all about, really, in sort of Venue. So we help companies do things better, I believe, because, just by having that infrastructure in place and asking them to do things a certain way, we can help them to be more compliant.

Dana Barrett - Yeah.

Anthony Sharratt - Right? So there's no emails flying around. There's no, oh, I'm going to email John or Diana or whatever it is. No no no no, you're going to bring them into Venue and you're going to all work within this sort of environment.

Dana Barrett - So yeah,

Anthony Sharratt - So that's really, I think that's really important. We're supporting the development of those regulatory kind of requirements, and almost helping people change their culture as well internally, because of the technology.

Dana Barrett - Yeah, and we were talking about, at the beginning of our conversation, that there's more governance already in your region than in the US, to some extent, and it's, again, in different parts of the region, I'm sure. But at the end of the day, I think the governance part is the hardest part for a lot of people to get their head around. You can say you're doing it, but now you can show that you're doing it.

Anthony Sharratt - Yeah.

Dana Barrett - Yeah.

Anthony Sharratt - So we're not experts in governance.

Dana Barrett - Right, but it's controls. That's part of what governance is.

Anthony Sharratt - But the controls around those governance, that's where we can offer sort of the expertise, and the support. So we have, we are a technology business. We are a software company. Make no bones about it, but we also have excellent project management teams who have worked on hundreds of deals, so they have good practice, so they're able also to support our clients in their everyday workflow processes. Yes, some of that's quite manual still, but they help them with that. So yeah, we're helping them to be better custodians of their own data in a way.

Dana Barrett - Yeah, yeah.

Anthony Sharratt - Yeah.

Dana Barrett - Well before we close out, Anthony, anything else you feel like we should talk about as it relates to the future of virtual data rooms? Anything you would really love to see happen that maybe isn't quite there yet?

Anthony Sharratt - Yeah, I think, look, I think the future is good for data rooms. I think it's there. Just the security, and you mentioned it right at the beginning that it's a secure place to kind of do things. I still think that the infrastructure that we have built around our data room is so tight, is so good, that I still think people are going to be using us more and more outside of, and this is where I think it's interesting, the typical transactional work that we've done. We talk about M&A deals and IPO due diligence and sort of debt transactions, but I think there's a bigger application for what data rooms can do.

Dana Barrett - Yeah.

Anthony Sharratt - Because they were built for the transactional market. It's as simple as that. But I think there's a much broader application, and so, in order for us to kind of be relevant to those different applications out there, I think we need to sort of, whether it be interface changes, do we actually kind of build a product that's going to support human resources, right?

Dana Barrett - Right.

Anthony Sharratt - Do we kind of, do we work with accounting firms to kind of help them do their auditing processes, right? And so there's, that's why I think we need to sort of be more focused. But the transactional business keeps us really really busy, but I just do think we need to look outside of those and I think we'll, as we did with transactions, I think we'll find with those other applications out there that we'll build more technology around that. So it's almost like chicken and the egg in a way, so you build something, you start using it, and then you work out really, we listen to our clients, what do you need? We're not just building a shiny thing here. It's shiny, it's great, but does it really work for you? Does it help you? So my thing, as a business, as a company, we are becoming much more, we've always been quite focused, but we are now, we're listening to our clients even more, because they are, that's where the future lies. That's where the future is for us, I think.

Dana Barrett - Yeah, it was funny, because I was going to throw in one last follow-up and ask you sort of what you think sort of the difference is between DFIN and all the other virtual data rooms that are out there, but you kind of just went there, right? We're looking at how, we're really listening to what the customer is trying to achieve.

Anthony Sharratt - Yeah, absolutely. Well I think that, and I'll add just one thing to that, I think culture is superbly important. So go to the social element of ESG, you're looking at a culture within DFIN, this is, the legacy business is over, since 1860, the business, right? And I think that the culture here has evolved, but it's not changed that much since I joined 23 years ago, and I think culture's really really important. We're a, we still have that feel of a family business, which is different. We're not owned by an investor, we're owned by shareholders, so that keeps us, I think that keeps us honest. So I think, culturally, we offer so much to not only the employees, but that reflects well in the service that we offer our clients. So yeah, it's important.

Dana Barrett - I love it. Anthony, thank you so much for your time. I really appreciate it.

Anthony Sharratt - No, thank you very much indeed. I really appreciate it, take care. Cheers.

Dana Barrett - This has been the Insider by DFIN. We'll see you next time.