July 12, 2023
Robin AI helps PE firms with AI-powered contract searching and comparing, instant report generation, and custom reminders for side letter management
July 12, 2023
Managing side letters is a growing challenge for private equity firms. With more investors demanding special terms, PE funds can easily become overwhelmed tracking obligations across numerous contracts.
We recently spoke with the private equity-focused publication The Drawdown for the latest edition of their “What the AI?!” series. The discussion focused on the AI technology powering our products, which serve as a new form of software infrastructure purpose-built for the legal sector. Our Co-Founder and CTO James Clough discussed how we combine legal and AI expertise in our LLM-powered contract copilot and dedicated assistant, Robin.
Following on from James’s interview, we thought it’d be a good opportunity to go into more detail about how Robin AI enables private equity funds to have maximum oversight of their provisions and obligations in the face of an ever-increasing number of side letters.
Built by the combination of Robin AI’s in-house legal and technical experts, Robin uses cutting-edge applications of generative AI and large language models (LLMs) to instantly convert natural language queries into visually distinguishable filters. This allows users to perform a rapid, reliable search through their contract repository and ensures critical information is always only a click away.
This functionality is perfectly tailored to side letter management, which is something that funds need to stay on top of if they’re to avoid missed obligations to investors and the threat of increasingly tighter SEC scrutiny leading to subsequent sanctions.
Within the Query module of the Robin AI platform, users can ask Robin a number of questions related to different aspects of their side letters such as key terms, provisions and obligations.
For example, side letters often contain provisions to avoid specific types of investments on religious or ethical grounds, like alcohol, tobacco or gambling, and if there’s uncertainty about which industries funds can invest in, a user might ask Robin, “can I invest in a microbrewery?”.
Robin will then drill-down into the contract repository, locate the relevant information within the side letters and present the findings.
Equally, there is clause compare functionality, which allows users to quickly surface the most common wordings for specific clauses in their contracts, and then compare all of the different wordings against each other. This removes potentially hundreds of hours of manual work and means that obligations are never missed.
This feature is particularly helpful when dealing with the MFN election process, which poses a key challenge to private equity funds when it comes to managing side letters, as it requires considerable visibility across a large number of contracts to ensure that all investor obligations are met.
Another key aspect of Robin AI’s capabilities that will assist private equity funds with side letters is the rapid generation of reports. Funds have a duty to regularly report to investors on things like ESG or financial developments, but locating and analysing all the data then manually compiling these reports takes a significant amount time.
All users have to do is simply ask Robin to generate reports on the relevant areas of interest, and in a matter of moments they’ll receive a fully-drafted, detailed report, which they can make any edits to and then send out to investors.
Due to the volume of side letters that private equity funds have to manage, it’s easy to miss key dates associated with obligations that are buried in all the data. With the reminders feature, users can ask Robin to locate these dates and set reminders for when they need to be notified.
Reminders are then sent to pre-selected recipients on the required date, where they’re automatically taken to the relevant clause and can see any appropriate actions they need to take.
With their ever-growing prevalence and complexity, side letters undoubtedly create a multitude of challenges for private equity funds. Thankfully, Robin AI is here to help.