Is Your Data and Operating Platform Ready to Support Multi-Assets?
January 31, 2024
Read Time: 6 minutes
Inst'l Asset Managers
Institutional asset managers are increasingly investing in multi-asset strategies as they look to expand into new markets, broaden their global reach, and diversify their portfolio.
Yet, operational processes and systems infrastructure often struggle to support the investment activities of multiple asset classes and managers converging in one investment portfolio.
For institutions investing in multi-asset strategies, they must be ready to support investments in any asset class around the globe. What’s more, institutions must be primed to aggregate underlying data to create consolidated and sleeve-level views to manage risk, analyze performance and net margin requirements, and optimize the overall portfolio. For institutional asset managers seeking diversified portfolios that go beyond traditional asset classes, their financial platforms must be able to adapt to this evolving trend.
The question that arises: Is your platform ready to support multi-assets?
Multi-assets refer to the inclusion of the various asset classes in an investment portfolio. Traditionally, institutional asset managers focused their portfolio on investments in the public markets. Today’s contemporary investment landscape demands a more diversified approach. The concept of multi-assets has gained significant traction. Multi-asset class investments offer exposure to a range of asset classes, sectors, investment strategies, and individual security exposure.
Multi-asset class platforms equip firms with the insights they need to track performance and identify new opportunities for growth. By unifying public and private investments on a single platform, firms are empowered to:
As the lines between asset classes blur, firms need an agile, integrated platform to enable public and private teams to collaborate effectively. Re-platforming applications to support asset class convergence can go a long way toward an asset manager’s success.
By unifying data from numerous disjointed systems, asset managers can minimize the need to maintain manual files and processes. Automating calculation of key performance metrics including multiples and IRR, often laborious and complicated processes, can also help firms.
While regulations are fewer than public markets, private funds are still subject to certain reporting requirements and federal rules that will only increase over time. A bi-temporal data model can help organizations maintain integrity on asset attributes with detailed audit capability, preparing them for future regulatory changes in private markets.
To create the transformative outcomes that drove their initial interest in new asset classes, firms must continually evaluate the capabilities and advanced technologies that enable business intelligence. From upskilling professionals, to tightly integrating operations, data, and analytics, asset managers must ensure they are examining all aspects of their operations.
Re-platforming data and technology is necessary to support the convergence of investing in a new asset class. An integrated platform that enables collaboration between public and private teams is essential for success. Institutional asset managers must continually evaluate advanced technologies to enable business intelligence and uncover valuable insights.
In principle, data, analytics, and investment processes are comparable for public and private companies. However, the variances between the two asset classes are substantial enough to require re-platforming of existing systems.
As firms increasingly invest in new asset strategies, an asset manager’s platform needs to speak the language of the new asset class – capital calls, schedule of investments, cash flows, and more. The nature of what’s captured, such as data used for valuations and performance calculations, is different between the public and private markets. Data for private investments also requires integration from a new set of vendors, partners, and administrators so that managers can aggregate information to understand exposure, risk, cash and investment needs, and full portfolio reporting.
Platforms for public and private assets must be able to work cohesively together to give managers an accurate and holistic view of their investment portfolio. Building a shared data platform to unify data and operations across public and private investments empowers firms to aggregate holdings, performance, cash flows, risk analytics, and reporting.
IN CASE YOU MISSED IT: PAAMCO Prisma Joins Arcesium Technology Platform
A large asset manager was looking to expand into a broader range of new markets and asset classes. The firm struggled to clearly track investment flows and data. Numerous requests for customization also made reporting increasingly difficult.
Using our SaaS platform’s financial data stack and multiple integration mechanisms, we helped the client:
A unified data platform and powerful business intelligence tools now enable our client to efficiently report to stakeholders and gain a competitive edge as they explore new markets and asset classes and respond to changing industry demands.
READ THE FULL CASE STUDY: Operationalizing Multi-Manager Strategies
Firms must continually evaluate the capabilities and advanced technologies that enable business intelligence and empower them to create the transformative outcomes that drove their initial interest in new asset classes. By continuing to push against traditional industry boundaries, while modernizing tech ecosystems, asset managers will be in a stronger position to think beyond operations and focus on uncovering the insights that matter.
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