The Road to Unified Data in Private Credit
Over the past decade, the boom in private credit has created a deluge of increasingly fragmented, disparate datasets that burden legacy systems and processes and create hidden financial, legal, and compliance risks.
An EY survey of alternative asset managers found that only 27% have systems capable of real-time reporting and decision-making. In comparison, 36% still rely mainly on manual processes to support investment-related decisions.i
However, unified data or, more specifically, a unified data architecture can impose structure and uniformity on bespoke and fragmented datasets. Such an approach creates a single source of truth that:
- Overcomes reconciliation challenges associated with advanced entity matching.
- Accurately maps term loan contracts and tranches of pooled loan investments to parent credit facilities.
- Allows quick distribution of accurate data to investors, regulators, risk, treasury, and PMs.
- Normalizes entities, instruments, facilities, capital activity, and covenants into canonical schemas.
- Masters identity mapping across systems.
- Computes IRR, accruals, waterfalls, and coverage and covenant checks with versioned logic.
- Controls lineage with bi-temporal storage, audit trails, break management, and attestations.
- Standardizes ingesting documents, emails, agent notices, pricing, and administrator feeds as data.
- Enables unified NAV, look-through, and reconciliations, putting public and private portfolios on the same consistent footing.
Best practices on the road to unified data
These benefits require effort and a phased and iterative approach. But firms should take on data unification before automation, since automating fragmented datasets will amplify chaos. The rules must be established first before automation can operate effectively.
Modifying incoming datasets incrementally keeps the process manageable. For example, a private credit manager might begin with agent notices, then admin reports, then covenant libraries. The firm could then deploy recurring calculations as “shared services” used firm-wide to standardize key financial computations and logic.
Finally, firms should build governance into the process from the outset as an embedded feature of enterprise data. Aspects such as data lineage, audit trails, and attestation requirements can be extremely difficult to apply retroactively.
This phased approach avoids disrupting firm operations and optimizes functionality by giving the evolving unified data system time and space to develop, grow, and fully mature. It also avoids the trap of multi-year tech transformation programs that promise to fix everything in one fell swoop, and when they go live, hit unanticipated snags and generate cost overruns.
Unified data is a strategic imperative
The case for unified data goes far beyond operational hygiene:
- Portfolio and risk teams armed with reconciled, current data are far more effective in negotiations where leverage often depends on timely, accurate information.
- Firms that have embraced and implemented unified data will find themselves optimally pre-positioned to withstand greater regulatory scrutiny of the private credit sector.
- Unified data equalizes the precision of public and private reporting data, ensuring consistency across NAV, exposure, and risk reporting.
- Hidden risks due to manual reconciliations, duplicate entities, misapplied covenants, and missing cash flows are all but eliminated.
- Firms that rely on spreadsheets, local databases, and manual reconciliations will face rising costs, slower reporting to investors and regulators, and ultimately lose market share.
An all-hands-on-deck approach
Successfully implementing a transition to unified data requires more than technical proficiency. It also requires leadership and buy-in from firms as a whole. Unified data should be framed as a company-wide strategic initiative that ties technology budgets to growth prospects, risk management, and compliance outcomes.
The operations, IT, and risk teams need to be involved at the early stages of the transition to ensure unified data starts producing usable results as quickly as possible to boost internal confidence and momentum, which are critical ingredients in any transformational campaign.
Ideally, the initial targets for a data unification transition should be whatever the firm’s most burdensome pain points are, be they covenant checks or cleaner investor templates. Affected teams will find their workloads and stress levels reduced, allowing them to re-prioritize their value-producing functions.
Strategic stakes
As the private credit market swells from nearly $2 trillion in 2023ii to $2.6 trillion in 2026,iii that growth will shatter the fragmented data systems already buckling under today's load. Managers piecing together reports from dozens of disparate sources will watch their competitors leave them behind. Firms with unified data can scale portfolios without drowning in reconciliation nightmares or version control chaos.
The advantages run deeper than smoother operations. When covenant data lives in one authoritative source, you catch breaches before they escalate. Portfolio exposures become crystal clear across every investment vehicle and jurisdiction. LPs get consistent reporting that reconciles. Regulators see the clean audit trails they demand.
Fragmented data creates fragmented decision-making. Fintech lenders and institutional platforms already operate from single sources of truth. Managers still wrestling with mismatched entity records and conflicting cash flow data face a stark choice: Unify or fall behind. Institutional capital flows toward managers who can demonstrate data integrity and reporting consistency.
However, the transformation window is closing fast. Firms that master unified data now will dominate tomorrow's market, capturing an outsized share of both capital and returns while their competitors scramble to catch up.
The unified data readiness checklist
This checklist can help assess if your firm is ready to move forward with a unified data implementation. Each “yes” answer indicates greater readiness.
- Is there a clear mandate from leadership?
- Is there cross-functional buy-in rather than IT only?
- Does the transition have a budget and dedicated personnel?
- Have critical operational pain points been identified and prioritized? E.g., manual reconciliations, covenant checks, fragmented investor reporting.
- Is there a systemic plan to extract data from unstructured documents?
- Have internal data standards, such as schemas and calculations, been defined?
- Has a data governance framework been established?
Authored By
Jean Robert
20+ years of direct credit experience with a background in helping debt issuance groups of all types leverage financial technology to scale operations and enhance deal execution. At Arcesium, his focus is on partnering with private asset firms to achieve their infrastructure goals in the middle and back-office, supporting efficient revenue growth while improving the total cost of ownership of their systems.
Share This post
[i] 2024 EY Global Alternative Fund Survey. https://www.ey.com/content/dam/ey-unified-site/ey-com/en-gl/insights/wealth-asset-management/documents/ey-gl-ey-global-alternative-fund-survey-12-2024.pdf?download
[ii] McKinsey, 2024. https://www.mckinsey.com/industries/private-capital/our-insights/the-next-era-of-private-credit
[iii] Morgan Stanley, 2025 Private Credit Outlook, December 18, 2024.
Subscribe Today
No spam. Just the latest releases and tips, interesting articles, and exclusive interviews in your inbox every week.
