Investments in data and technology

The pace of advancement of technology and the creation of data continue to accelerate, making it imperative that asset managers understand how their business can be enabled by adopting various tools that promote better decisionmaking and business execution.

Upgrading technology in all key business processes remains top of mind for all managers, but the trend we expect to dominate in the decade to come is maximizing data as a competitive advantage, not just in the front office, but in operations, risk management, client engagement and reporting as well. Managers create and consume tremendous amounts of data, whether it be specific to portfolio construction, investor behaviors or operational execution. We are starting to see sophisticated managers create data strategies to help them harness the power from all of their internal data to run a more efficient business, front to back office.

Technology investments continue throughout all areas of the business

Hedge fund and private equity managers continue to make meaningful investments in technology across their organizations. Compliance and regulatory reporting systems top the list of areas in which alternative managers are investing. As regulations continue to change and smarter technology solutions are developed, managers recognize that they need to continue to invest to keep pace and to avoid costly and reputationally damaging reporting errors.

Upgrading portfolio management systems will always be a priority as managers strive to achieve the fastest and most accurate execution possible.

The area that continues to increase in importance and activity is investment in data warehouse projects. Good data hygiene is top of mind for all managers and enhancing data warehousing allows them to better consume as well as analyze data from counterparties and improve the quality of risk management and reporting.

Slightly more than half of respondents indicated these various investments did have a measurable return on investment. These projects are not only critical to enhance these business processes, but also to manage the bottom line.