Our new Atlas 2024 report shines a light on the outlook of private markets. It is based on research with 201 global private fund managers and European asset allocators. Its findings range from challenges in capital raising for private market fund managers to ways in which wealth managers and DC pension schemes will invest in these markets.

Technology in private markets

The scale and complexity of private markets can bring challenges of their own, such as how to get the right technology and systems.

When we asked senior individuals at these leading firms about their technology and systems, we found a divergent range of technology capabilities and readiness.

Many fund management firms rely on manual processes, not least in data management, and legacy systems. These may not fit the future requirements for private assets with their bespoke valuation metrics, data and reporting requirements. As our respondents predict the revolution of  global private assets under management rise from its current $13trn to an estimated $21trn by 2030.

The majority (83%) of global private market managers surveyed say their systems are “quite well incorporated” – indicating the possibility and appetite for improvement.

The importance of technology within a private markets business is undisputed.. For example, 60% of our respondents expect technology to be key in supporting accurate valuations. Some 42% see AI slotting into risk management processes and functions. One in ten adds that it helps with exit strategies.

Many managers are already on this path. All our respondents will increase investment in AI – and most of them expect to do so by at least 50%. Such costs are no doubt featured in board-level conversations across the investment sector. And so are the benefits of outsourcing – in our experience.

Just 16% of global private market fund managers surveyed say their systems are extremely well incorporated for the forthcoming private markets revolution. Meanwhile, nearly two out of three (64%) of global managers will increase outsourcing in the year ahead, with 20% planning to dramatically increase their use of third-party service providers.[1]

Third party specialists can provide an effective bridge from “quite well incorporated” towards “extremely well incorporated” systems. Having the right systems, technology and expertise will be crucial for managers competing in this fast-paced segment – but the prize is high.

The full Carne Atlas 2024 report offers more insights into the role technology will play in revolution of the private markets and how investors can make the most of it.

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