Investment Ops Transformation: Building Resilience for Asset Class Convergence

Conquer asset class convergence with scalable end-to-end workflows

A renovated investment ops team requires asset managers to bring in a single golden thread of data that makes sense of data noise; and front-to-back operations built for their unique needs. As institutional portfolios expand further into areas like private credit, managers face mounting complexity in data integration, performance measurement, and enterprise coordination. Those still operating with many disjointed systems cannot satisfy these demands without investment operations transformation.

Managers can only gain mastery over asset class convergence if they build scalable, end-to-end workflows on a foundation of centralized holdings management, across public and private assets. They have to be able to see the firm’s holdings and performance at any point in time, no matter the assets involved. End-to-end operational platforms like Opterra keep the back-office ops buttoned up to fortify risk management and compliance. Fast, automated reconciliations prevent reporting gaps. Workflows stay consistent across all platform modules, ensuring that changes in one functional area like corporate actions automatically reflect in others like accounting and reconciliation, thus maintaining data integrity throughout the investment lifecycle.

Blending performance measurement for blended strategies

Blended strategies bring blended metrics to performance measurement. You have to do the blending on both counts. While standardized methods like P&L calculations are common in public asset class trading, private assets are measured with metrics like internal-rate-of-return (IRR) and multiple-on-invested-capital (MOIC) to track ratio of value created to capital invested. In the absence of an industry standard for combining these, it is incumbent upon the asset management firm to integrate public and private asset performance into a single dataset. This is accomplished with a system that helps translate numerous metrics into a standard, unified model. With millions of retail investors now positioned to get access to private market asset classes, the necessity of look-through risk reporting on the client level takes on more urgency. Managers need to not only get a clean view of the firm’s portfolio but also a single view of clients’ portfolios that present a consolidated story of performance, exposures, and strategy.

In achieving investment operations efficiency and optimization, a firm is propelled forward into a position where its people can make complexity a friend instead of foe — for investing in new strategies, vehicles, and structures, and higher-level risk management.

Containing the cautions about public-private asset convergence

On September 19, SEC Commissioner Caroline Crenshaw noted in a speech, “Opening up private markets to retail investors in the manner currently contemplated would fundamentally change how those markets function...All of these efforts to blur the lines between our public and private markets will have consequences.”^iv The easing of regulatory frameworks and the postponement of Form PF rules to late 2026 have propped open the floodgates. While some have expressed caution about systemic risk, firms can only control their own risk management, taking steps to protect themselves from liquidity, counterparty, and valuation risks. Further, investors demand substantial transparency.

High performing asset managers will erect a modern investment operating model, baking risk management into all functions. In private markets, risk analysts must evaluate liquid and illiquid asset performance — and semi-liquid structures like evergreen funds. They are looking at qualitative measures, IRR sensitivity, and cash flow-at-risk (CFaR) while traditional asset managers are looking at quantitative VaR and volatility metrics. A manager’s failure to collate the overall portfolio risk metrics could misprice derivatives, report exposure incorrectly, and make incorrect margin calculations, potentially resulting in catastrophic risk management decisions.

Flexible, integrated data ecosystems for modern investment ops

With a flexible, integrated data ecosystem that enables no-code, self-service risk analysis, managers can customize and use dashboards that return timely reports on factor exposures, real-time macro risk, embedded PME comparisons, liquidity-adjusted VaR, and scenario-based portfolio stress testing.

The data infrastructure must have the models built-in to handle the ingestion and normalization of datasets from all lifecycle events, reconciling differences in industry classifications. Investment data platforms like Aquata have the capability to identify common data entities and their relationships across systems, normalize multiple models, and map existing data structures to a unified framework. This is the key to standardization, which ensures that data is stored in a consistent format.

There is little room for error when dealing with big sums in a volatile market. A firm with flexible data management technology can reliably generate precise statements on holdings, valuations, and risk reports. Automated security masters ensure accurate classifications, preventing misallocated capital, regulatory breaches, and valuation mistakes. Investment ops automation saves humans considerable time spent manually combing through every price movement or position change to find outliers.

The Aquata platform harmonizes diverse data allowing analysts to slice and dice data. This is fundamental to Opterra’s modern operating framework connecting public and private markets and supporting flexible, blended strategies.

Containing the costs of convergence

Structural changes are exerting pressures at multiple operational points for firms that deal in cross-asset, blended public-private strategies. Asset managers can use automation and flexibility to outperform competitors in dynamic markets and volatile funding environments. The Aquata platform’s cloud architecture offers elasticity and scalability, allowing firms to expand resources as needed. The interlacing of traditional and alternative investment management produces challenging investment horizons, fee and compensation structures, and tactical processes.^v By unifying workflows and insights across the front, middle, and back office, our technology enables institutional managers to enhance transparency, accelerate reporting, and sustain growth in today’s evolving landscape.