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To succeed, asset managers must maintain an operating model that functions seamlessly within relatively illiquid markets.
Our latest annual Global Alternative Fund Survey found that over one-third of investors are broadening their private equity exposures, with others looking to infrastructure, real estate and other private market offerings.
This move toward alternative asset allocation has accelerated in recent years, as historically low interest rates along with growing market uncertainty have forced institutional investors to look farther and harder in their search for returns.
Our latest thought leadership, which you can download via the link below, discusses how the influx of institutional assets has not only boosted competition within the alternatives space, but has also led multi-asset managers to reassess how to achieve efficiency and scale as they expand into alternative investment strategies.
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As the traditional and the alternative investment spaces are increasingly converging to meet investor demand, asset managers are finding that the nature of illiquid alternative assets is ill-suited to traditional fund management processes and systems. Key challenges include:
- Functional and governance considerations
- Data and valuations
- Organization and people
To succeed in the alternatives segment, asset managers must maintain an operating model that can function seamlessly within these relatively illiquid markets. We can advise fund management firms as they weigh the benefits of adopting new systems, tools and processes, as well as help assess prospective alternative opportunities prior to committing investment capital.
EY’s leading-practice target operating model framework, which we introduced in this article, allows complex business scenarios to be decomposed into distinct views of the organization, which supports a structured and consistent analysis and design that EY uses to deliver the target operating model.
Summary
Asset managers need to maintain an operating model that functions seamlessly within relatively illiquid markets. Download “How to achieve agility in alternative investments (pdf)” report to learn more.