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and hedge fund strategies . According to McKinsey , assets under management ( AuM ) in private markets reached an all-time high of $ 9.8 trillion in 2021 , up from $ 7.4 trillion in 2020 . Most of this money went into private equity – an asset class , which has outperformed not just the public markets but all other alternative investment strategies . Elsewhere , funds controlled by private debt zoomed past the $ 1 trillion mark off the back of strong performance , with Preqin confidently asserting the asset class ’ s AuM could more than double within the next three years . What was once a cottage industry is now a very large one awash with institutional money - and with this comes new responsibilities .
Reporting takes priority Although institutional investors – including pension funds - are allocating record sums to private capital , this is conditional on managers being transparent and open with them about their portfolio holdings and operational processes . Increasingly , investors are asking for more granular information about private fund portfolios , and they want these metrics delivered to them in real-time and through digital channels - including application programming interfaces ( APIs ). Following the massive growth in private markets over the last decade , regulators are also paying greater attention to what is going on in the sector . The SEC now wants managers of private funds running $ 150 + million to provide clients with quarterly reports containing in-depth and itemised information about performance , fees and expenses . Another major development is that the SEC is planning to force $ 1.5 + billion private equity firms to report on so-called ‘ key events ’ – principally when a fund is
“ We are seeing asset owners and managers wanting to streamline their operating models , both in terms of their operations and technology infrastructure but also wanting data and reporting solutions that integrate across their organisation and their service providers .”
CATHAL CORNALLY , DIRECTOR IN FUND ADMINISTRATION PRODUCT , MARKETS AND
SECURITIES , HSBC
facing some sort of significant stress – within one business day of the incident happening . This comes as the SEC recognises that a lot of the data being reported to regulators by private funds is done so on a quarterly or annual basis , meaning it is frequently out of date at the point of review . Without any timely information , build-ups of systemic risk or potential mistreatment of investors could go unnoticed by regulators .
Demand for data is reaching its peak In order to compile these regulatory and investor reports accurately , managers need to organise their data into a coherent
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