Model 1: unified, end-to-end platform for simplicity and efficiency

It may seem a foregone conclusion that CTOs will favor a single end-to-end platform for front-to-back investment ops. There are plenty of benefits, including the reduced number of vendors you're dealing with and the integrations and scale that come with a unified platform. It is a solution that many vendors support, and drives concrete efficiencies in operations. This model is preferred by smaller, less complex firms focused on efficiency that did not grow by acquisition. For example, a firm with $15 billion–20 billion AUM demonstrating a focus on efficiency and organic growth from public to private, without complex acquisitions, will do well in using a unified, single operational platform. Such money-saving efficiencies are particularly compelling to firms struggling to control ballooning costs.

Additionally, if a firm leans heavily on managed services due to either resource constraints or a focus on efficiency, this model is likely the better choice. CTOs appreciate the lower risk associated with integrations and prefer dealing with a single platform that simplifies the managed services structure. Utilizing a single platform that covers the breadth of asset classes allows firms to pivot quickly into new strategies (e.g. moving into private credit) without incurring the expense and time delay of setting up entirely new technology and hiring new specialized teams.

However, for firms whose priorities move toward becoming more agile and helping the business launch new products, another approach often becomes necessary.

Model 2: data management and unification for agility and scale

Larger, more complex asset management firms may enlist multiple vendors providing separate managed services, which complicates the matrix. Such firms may need sharper agility for ad hoc business needs and more bespoke operational capabilities, especially if they have grown through acquisition and cannot easily rip and replace. In situations when a firm expands with acquisitions, sometimes the acquired entity may resist replacing their existing bespoke platform.

If a big firm buys a few affiliates, they will come into the operation with their respective platforms, let’s say private credit, private equity, and infrastructure. It may be cost prohibitive to take them all out and just replace them with one unified operational platform. That scenario calls for a centralized data platform (which integrates easily with other platforms, out of the box) to bring all the disparate datasets under one umbrella and provide necessary workflows on top for performance reporting and analytics.

Cross-asset growth demands flexibility

The new avenues opening the retailization of private markets involves distributing private market funds to individual investors, often through hedge fund alternatives and evergreen fund structures like interval funds or business development companies. These structures introduce complexities such as valuations, wherein infrastructure must synchronize valuation cycles between liquid and illiquid assets to produce a unified NAV. In this case, using a unified data platform to bring together data from various existing public and private platforms is an ideal solution.