Alternative Asset management Redefined - Embrace Technology? But its a Huge Cost!

Alternative Asset Management and Technology

It’s astonishing that the $30 trillion asset management industry still relies on 76% of its tasks on spreadsheets. Asset management, and technology, are natural partners, where the industry generates tremendous amounts of data, and technology of-course hopes to manage that data. With the growing demands of getting better returns, increased transparency and regulatory demands, there is an increased push towards better tools and technology solutions.

In this series we take a look at some of the challenges of current players in the market.

1. Legacy software’s approach to business - Legacy software’s were written in early 2000 addressing the challenges of simpler asset management needs, and very old technology. They were designed to be “point solution” for the alternative asset managers, addressing needs of wither just the accounting or risk or trade management but never a complete data platform.
2. Cost of the technology – The economics of asset managers are such that without scale they do not have the resources to install enterprise class solutions. So they are forever playing catch-up with technology. For startup asset manager or mid-level asset manager making an investment into technology is a difficult call due to implementation and other costs.

With lower technology deployment Asset Managers are struggling with managing complex portfolios spending time and resources in basic data management that could be better spent in analyzing their data. This deprives the Asset managers and investors alike of required insights into the business to manage the complexities of today. The lack of infrastructure often leads to general reluctance on the part of fund allocators to allocate and fund early stage managers.

“Performance analytics” is critical to success, whether used by investors to identify true drivers of value and make better fund investment decisions, or by managers to better understand their performance, articulate their story and enhance investor relations. Yet the process of analyzing and reporting on fund performance can be time-consuming and error prone on spreadsheets. Getting comprehensive performance analytics requires detailed data capture and organization.

Asset manager need to capture every little detail on his deal, his assets, cash flows, investors on a unified platform to best analyze this data. We have seen numerous asset managers have distinct data applications, for example one catering to customer relationship management, another to accounting with a whole lot of spreadsheet managing deals, and then trying to mash this data up using spreadsheets. The process remains extremely time consuming, error prone and ad-hoc leaving the manager with little time for creatively articulating the strategy of his portfolio.

Alternative asset managers are at that critical crossroads where they need to invest in technology  to sustain growth, and take advantage of the shifting asset allocations in the market. Technology provides the means to address the complexities of today’s business, in creating scalable and flexible illiquid portfolios.  And modern technology is available with low upfront adoption costs.

Pepper was designed to meet the complex needs of  alternative asset managers to have a comprehensive, secure, scalable cloud based platform. With an innovative cost structure Pepper breaks the cost barrier faced by the early stage fund manager.

Learn more on the cost structure of Pepper in the next blog and how it breaches the technology cost barrier even for the startup fund managers! Visit us at www.onpepper.com and book your live demo now! or 📧Email Us

Author: Vivek Saxena

India Head Onpepper LLC

48 Wall Street., 5th Floor

New York, NY 10005