The Essential Toolkit for Alternative Asset Data Management

In a recent Clearwater Analytics Flash Poll, we surveyed over 100 institutional investors with questions regarding alternative investments. We found over 50% of investors face challenges around the availability, quality, configurability, aggregation, and reconciliation of data for alternatives.

These obstacles can be difficult to overcome, but with the proper tools, teams can set up sustainable practices to grow the alternative assets in their portfolio. In this guide, we will look at some common challenges surrounding alternatives, and then dig into a set of essential tools to effectively aggregate, reconcile, and report on your alternative asset data.

Want to see a real-world example of the tools you can use to optimize alternative asset accounting and reporting? Check out this on-demand webinar to see how your peers are managing their alternative investments.

Common Challenges

Many challenges stem from an unsustainable approach to managing alternative assets which involves manually collecting and inputting values from PDFs or paper statements. This manual process is time-consuming and error-prone and can discourage investment in alternative assets.  In our research, we have identified several other common pain points surrounding alternatives:

• Availability/timeliness of data. Alternative assets present unique challenges in the availability and timeliness of investment data. Data sources might deliver the data in different formats and at different times.
• Data quality. Assuring data quality is another common pain point when working with alternative assets. The process of manually aggregating and reconciling data can be time-consuming and prone to user error.

• Lack of automation/manual processes. Automation can make processes surrounding alternative assets easier, but many teams still rely on manual efforts for data collection and reporting. It is better to rely on automated software such as the Clearwater solution for data aggregation, reconciliation, compliance monitoring, and reporting.
• Ability to manipulate data. After information is collected, normalized, and reconciled, teams can begin manipulating data. At this point, many organizations still struggle to organize their data in an efficient and insightful manner.
• Total portfolio view. Another difficulty comes when trying to get a high-level view of all alternatives in a portfolio. There is huge value to being able to see an overview of the entire portfolio, but aggregating and maintaining such a resource can be difficult to perform in-house.

These challenges may seem daunting, but they can be overcome. Next up, we will look at some of the tools that businesses can use to make alternative accounting and reporting easier.

Advanced Reporting Software

Software with advanced reporting capabilities is an essential tool for any asset manager. Working with modern asset management reporting software means users have access to advanced formulas and custom data fields to match the unique requirements of any alternative asset in their portfolio.   Additionally, having access to a consolidated book of record is invaluable for accounting, performance, post trade compliance, risk reporting, and exposure reporting. Advanced document extraction and aggregation technology can make reporting faster and easier for the entire team.

Flexible Reporting Suite

Another essential tool for managing alternative assets is software that provides customizable dashboards to gain access to a combination of high-level views as well as more granular information.   Flexible reporting suites can also provide multi-period reporting to help users compare results over multiple timeframes. Analyzing multi-period reports can help identify specific factors affecting the portfolio that might otherwise be difficult to pinpoint.

Automated Validations

When manual efforts are reduced, validation processes become more efficient and accurate. Validation can be automated with advanced compliance tooling to constantly ensure data integrity.   In addition, automated emails can be enabled to send custom notifications about any new factors that could affect the portfolio. These automated alerts can keep the entire team up-to-date and automatically send them the information they need for their everyday workflow.

The Clearwater Solution

Clearwater Analytics provides the scalable infrastructure businesses need to responsibly manage investments, diversify asset classes, and solve data management challenges. Clearwater helps clients automate data management and reporting with a full-service solution for alternatives.  The Clearwater Analytics solution provides all the essential tools that teams need to aggregate, validate, and report their alternative asset data. Clients on the Clearwater solution gain access to a full toolkit to manage their alternative investment data, including:

• Custom reports and formulas
• Multiple data download types
• Easy access to statements
• Automated compliance data review

Ready to learn more? Talk to an expert today to learn how the Clearwater solution can help you meet your alternative asset goals.