Future-Proofing Private Funds: Insights for Efficient Expansion with Technology

The alternative investment management industry is experiencing a fundamental shift driven by the rapid expansion of private market funds, an explosion of data, and increasing expectations for transparency, efficiency, and scalability. In our recent webinar How Technology Fuels Efficient Expansion in Private Markets, co-hosted with LPGP Connect, industry leaders shared actionable insights on how firms can address all of these challenges with a resilient, future-ready, and scalable infrastructure. Here’s a closer look at the strategies reshaping investment management.

Data Governance: Ensuring Trust and Transparency

In private funds, data is the backbone of informed decision-making. Without strong governance and master data management, however, even the most advanced systems can fail. During our webinar, JP Patel, Partner and Head of Investment Systems at Ares Management, along with Piyush Singhi, Senior Managing Director, Credit and Private Funds at Indus Valley Partners, emphasized how data governance is not just a technical responsibility—it requires alignment across technology, business operations, and leadership.

Ensuring data transparency and lineage is crucial, particularly for key metrics like IRRs, because a single discrepancy at the source can cascade into significant downstream issues. To mitigate this, firms need to establish a dedicated data governance team composed of senior stakeholders. This team can ensure alignment across departments, maintain data integrity, and enhance visibility with dashboards and reports.

By embedding strong governance into the culture, firms can build trust with investors and regulators while improving operational efficiency. The right technology is essential for this, but success will ultimately depend on fostering accountability and collaboration.

Technology Investment: Balancing Innovation with Practicality

Technology adoption is no longer optional—it’s a strategic necessity. Firms must take a measured approach, however, ensuring investments align with long-term business needs rather than chasing short-term trends.

The key is to prioritize scalability and flexibility. Technology should be adaptable, allowing firms to scale as the business evolves. Instead of attempting large-scale overhauls, organizations should focus on incremental improvements by breaking larger projects into more manageable milestones that demonstrate value and help secure stakeholder buy-in.

Equally important is ensuring that technology investments are paired with strong internal processes and governance. Even the most sophisticated tools can fall short without a clear implementation strategy. By aligning technology investments with business objectives, firms can leverage innovations like automated portfolio management and advanced investment data solutions to stay ahead of the competition.

Cloud Adoption: Enabling Scalability and Control

Cloud adoption has become a cornerstone of modern investment management. For firms operating at a global scale, cloud infrastructure offers unmatched flexibility, efficiency, and scalability. But adopting the cloud simply for the sake of modernization can be a costly mistake.

A successful cloud strategy must be aligned with specific business objectives. This includes building a centralized data lake (e.g., on Azure) to enhance reporting capabilities and support seamless scalability. Firms should also take an iterative approach, testing solutions through proofs of concept before full-scale implementation. Some technologies will prove valuable and scale quickly, while others may need refinement or replacement as business needs evolve.

Cloud migration is not a one-size-fits-all solution. The firms that will maximize cloud technology’s full potential will be those that align adoption with business needs, maintain agility, and continuously reassess strategy to keep pace with technological advancements.

Automation and Collaboration: Driving Operational Excellence

Automation has become essential for reducing manual errors and enhancing efficiency. The webinar underscored the importance of automated workflows, such as integrating fund administration data multiple times a day to ensure real-time accuracy and compliance and minimize the risk of costly, end-of-day surprises.

Structured workflows, including dynamic checklists and approval processes, improve accountability and streamline operations. Collaboration plays a vital role as well. Engaging internal audit, compliance, and legal teams early in the process ensures that controls are embedded in system design, rather than being treated as an afterthought.

Equally important is developing strong partnerships with fund administrators and service providers. As investment firms expand—especially by acquisition—it is common to work with multiple fund admins, each of which requires strategic evaluation and integration. By fostering strong partnerships, firms can drive seamless data integration and scalability, strengthening both technology and middle-office functions.

The Road Ahead: GenAI and Digital Transformation

Looking ahead, the future of investment management lies in GenAI and digital transformation. Discussions during the webinar highlighted two key priorities: expanding cloud and data lake capabilities and accelerating digital transformation across business units.

GenAI adoption has surged in recent months, with tools like ChatGPT unlocking new insights from both structured and unstructured data. However, firms must approach GenAI with caution, balancing innovation with data security and governance. Structured proofs of concept can help define expectations, milestones, and risk management strategies for GenAI implementation.

Another critical shift will be moving away from legacy systems, such as spreadsheets and manual processes. True transformation isn’t just about automation—it’s about eliminating outdated workflows. Successful transitions require securing adoption before migration, clearly defining success criteria, and ensuring alignment with business needs.

Building a Future-Proof Infrastructure

The insights shared in this webinar provide a clear roadmap for firms navigating the complexities of private funds and investment management. By prioritizing data governance, strategic technology investments, cloud solutions, automation, and GenAI, firms can build a resilient and future-proof infrastructure.

For investment professionals and asset managers alike, these strategies are more than just theoretical—they will be essential for staying competitive in an increasingly data-driven and regulated industry. The firms that invest today in master data management, automated portfolio management, and next-generation investment data solutions will be the leaders of tomorrow.

How IVP Can Help 

The IVP for Private Funds platform provides a 360-degree view of the deal lifecycle with complete transparency. It can be used for a wide range of portfolio data management functions, from streamlining the data collection process to providing analytical dashboards and information required for investor reporting. 

IVP for Private Funds makes it easier to generate relevant insights and reporting by standardizing financial data templates and eliminating manual intervention across portfolio companies. IVP for Private Funds also helps users identify patterns in other business or financial metrics by analyzing data across portfolio companies, sectors, and industries. 

Additional features of IVP for Private Funds include:

• Fully customizable to accommodate any data point or reporting format
• Out-of-the-box reporting dashboards that provide a summarized view of all data
• KPI tracking and management
• AI-driven tracking and management of financials and covenants
• Data adapters to third-party aggregators
• Fully customizable closed-deal blotters with data audit capabilities
• Real-time mobile access to portfolios

Learn more about IVP for Private Funds right now or contact sales@ivp.in to set up a demo.