Shared Insights
Alts Boom Complicates Fund Shop, Service Provider Ties
Asset managers and their service providers are too often trying to hammer a square peg into a round hole when it comes to integrating complex investment options into legacy operating and technology systems, a new report shows.
As more complicated asset classes — like private markets and alternative assets — gain traction among asset managers, firms and their service providers are struggling to integrate those products into operating models and technology systems originally built for traditional assets, said Derek Pratt, a director at Citisoft, who coauthored the report.
“Trying to shoehorn these new assets into the legacy structures is just a source of frustration all around, for all parties,” Pratt said. “You have to wipe the slate clean.”
Asset managers are increasingly having to stitch together specialized systems and service providers to support private markets, digital assets and other nontraditional investments, the Citisoft report says. This dynamic has exposed operational gaps in how asset managers’ legacy plumbing connects with fund administrators, custodians and other service providers.
Read more on what STP’s subject matter expert, David Goldstein had to say here.
