The Impact of Technology on Private Markets

daappa surveyed general partners asset managers and administrators in the UK and continental Europe to explore how they are dealing with fragmented systems and operational data challenges specifically related to private market operations.

 

daappa explored the impact of operating model design on the key challenges that firms face and specifically data sourcing needs.

 

Survey participants included firms in the UK, Ireland, Luxembourg, and other European countries ranging from £150 million to £10 billion in AUM.

 

Of the respondents, almost half were operating a best-of-breed multi-vendor solution model which over the last 5-10 years has become the dominant operating model for both asset management and asset servicing firms.

 

Whether this decision has delivered on expectations is debatable given that 82% of respondents said that their operating model falls short of their needs. Of the main challenges ranked, business process improvement, operational efficiency, and risk management were the top three challenges.

 

When asked specifically about the data sourcing challenges there was a relatively even split across the board which may be surprising given that best-of-breed solutions are designed to solve specific needs such as data sourcing.

 

Observing the future drivers of technology, there was an overwhelming response that operational efficiency and automation/business process improvement are the two key drivers for firms to invest in technology.

 

A reduction of costs was also a key driver of technology investment, whether this will mean a continuation of the best-of-breed operating model or will see a transition to integrated end-to-end solutions, which are typically more cost-effective and typically minimise data integration challenges, is something only time will tell, but is a trend we are witnessing at daappa.

 

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