The growth of alternative investments shows no signs of stopping. 55% of our clients plan to increase their alternative allocations over the next five years. And they’re not alone. The global alternatives market will grow from $15 trillion in assets in 2022 to more than $24 trillion in 2028, according to KKR.
But alternative investments create unique challenges in how you manage, access and interact with data. Here are four challenges that you need to address if you want to get the most value from your alternatives data, optimize your alternatives decision-making and satisfy your end clients.
1. Manual processes
Many firms still rely on manual processes, but they’re resource-intensive and error-prone. It can take significant time and money to adapt them to the latest market changes and requirements. They also increase your operational and compliance risks, especially if you don’t apply strict governance and controls.
2. Legacy technologies
Historically, investment firms have managed data reactively, layering custom solutions to meet their evolving needs. While this addresses the immediate challenges, it‘s also led to a sprawl of siloed systems that don’t easily integrate and inefficiencies that slow down decision-making and increase workloads.
3. Data complexity
Alternative asset data is fragmented, high-volume, and often unstructured. You’re no longer dealing with the familiar sources from the equities and bond markets; alternative data sources include private equity firms, real estate platforms, and bespoke financial models. A lack of standardized datasets and bespoke deal structures adds to the complexity.
4. Integration and scale
Existing data platforms are often designed for public markets. As a result, they struggle to scale for the reconciliation, reporting, allocation and analysis demands of alternative investments.
But there are ways to address all of these challenges.
If you leverage the right technologies and strategies, you can modernize your data management for the future and make it easy to use your alternatives data to find new opportunities and grow.
Discover how in our white paper, Redefining Data Management for Alternative Assets: Unlocking Scalability, Collaboration, and Innovation with AI.