Implementing the decision to expand into private market investment strategies can be challenging for asset owners and institutional investors. Whether they choose a fund of fund strategy, a co-investment or even a direct investment, they all come with distinct nuances and, most importantly, avoidable pitfalls.
Once the decision has been made, various business areas including operations, IT, risk and reporting may be impacted. As the number and complexity of the investments grow, the support functions and demands on them also grow. Scaling up operations requires overcoming various hurdles. Relying on spreadsheets and legacy IT infrastructure becomes inadequate for meeting the evolving needs. Data management becomes a challenge, encompassing data integration, analytics and consolidation. Transitioning to a comprehensive data management system becomes vital. Addressing data security and implementing robust warehouse management systems are also crucial for success. Additionally, regulatory compliance and resource allocation can present obstacles as the investments grow—especially if the investments are overseas. Careful attention must be given to addressing these factors to ensure that the expansion up the value chain is smooth and efficient.
Managing multiple investment strategies requires flexibility. One effective approach is to outsource to a specialist fund administrator, providing immediate access to technology infrastructure and skilled professionals. This allows investors to focus on managing their investments effectively while relying on the expertise of the outsourced team. Reducing the operational burden will allow you to dedicate more of your valuable time to be focused on your investment strategies.
This is a topic that we are very passionate about. SS&C was honored to speak at the 2nd Private Markets Summit in Sydney on May 14, 2024, alongside industry experts from the Australian Retirement Trust, New Zealand Superannuation Fund and HESTA. We addressed how asset owners and institutional investors could navigate the complexities of investing across the Private Markets spectrum.
Given the challenges involved, many investment managers are choosing a comprehensive suite of operational solutions covering the entire fund lifecycle. These solutions are designed to help managers confidently navigate the complexities of private market investments. They support highly diversified portfolios and complex investment structures, encompassing private equity, private credit, real assets, and other asset classes.
Download our Building an Operational Advantage and 6 Things Your Fund Administrator Should Do For You brochures.