Comment: Empowering the middle office

by Contributor 14 April 2023

The use of technology in private equity has advanced in the past few years. However, with the demand to retain full control over the data, partnering with the right technology provider is gaining importance. Let’s take a look at which trends are currently impacting the middle office.

Several studies show the willingness to invest in technology increasing, as asset managers are trying to fulfil growing investor or internal stakeholder expectations.

When it comes to the middle office, what is really expected and what can be realistically provided?

One of the things that we have learned from our clients and prospects is an interest in solutions that help them enhance the investment lifecycle. These are expected to enable an end-to-end business process from origination, data management and portfolio control, all the way to reporting.

In this process, data management is one area where tech-enabled middle office services platforms are particularly useful. Private equity firms deal with vast amounts of highly heterogeneous data, and reconciling it is a daunting task. Tech-enabled platforms also use advanced data analytics to help firms stay on top of their portfolios and make quicker investment decisions.

Another area of the cycle is investor onboarding, where a modern middle office services platform should allow for automatic collection and verification of KYC and AML.

Finding such an end-to-end, safe but flexible solution – and keeping control of it throughout the entire investment lifecycle – is not easy.

Full middle office services platform in practice
Traditionally, middle office services were developed and managed in-house by private equity firms, which required significant investments in infrastructure, software, personnel and training. However, with the rise of tech-enabled middle office platforms, private equity firms now have access to a range of services that can be outsourced to third-party providers.

Our clients trust AssetMetrix to deliver certainty across the investment lifecycle, while taking away painful manual labour. Our tech-enhanced solutions can further reduce the risk of errors, improve overall efficiency and gain time for our clients to focus on more value-adding activities. We smoothly integrate our full middle office services platform to connect with the existing systems to allow for full transparency, client control and a single source of truth. This is also important as regulators around the world are increasing their scrutiny of private equity firms.

Tech-enabled middle office services platforms follow the transformation of the private equity industry. By providing greater efficiency and compliance capabilities, these platforms are bringing support to middle office professionals and are helping private equity firms manage their portfolios more effectively. It is very likely that tech-enabled middle office services platforms will play an even more significant role in the years to come.

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