Skip to main content

Why Automation Will Drive the Next Era of Private Capital

In the calm before the storm, foresighted fund managers are evaluating their technology and in many cases finding it lacking.

These are tough times for many sectors. The good news for private capital is that most firms have plenty of dry powder in reserve.

It probably won’t be long before they deploy it. Private capital activity may remain subdued for the moment, but we believe distressed deals are likely to take off in the next three to six months. And when deals start to look like good value again asset managers will not hold back.

So, things are quiet – for now. That gives managers a window of opportunity to get systems and processes in order before the next burst of activity. In this new era of private capital, it’s essential that they do.

Data management challenges

Better, more cohesive technology is an increasingly important part of fund management thinking. In the recent extensive research behind our Halo Framework – conducted with Everest Group – 75% of respondents highlighted an inability to consolidate siloed data systems as a major business challenge.

Over half (53%) identified data management issues as one of their firm’s top three technology-related challenges.

In other words, many asset managers realize that in a world of data their technology is no longer fit for their purposes. In this period of relative calm they’re asking what they can do about it.

A new attitude to technology

Private capital lags behind public markets in terms of technological sophistication. Managers considered alternative transactions either too complex to automate or too few to warrant a major investment in technology.

But that’s changing. Regulations and standards are tightening. Environmental, social, and governance (ESG) rules are throwing more data challenges into the mix. Investors moving from liquid markets want more transparency and more detailed and frequent reporting.

While complex deals require significant human input, there’s a growing realization that much of the administration around a private capital transaction can be digitalized and automated. That, in turn, frees up human resources for managing investments and other value-adding work.

The benefits of automation in private capital

All of this makes technology a growing differentiator in private capital. It creates more streamlined operations, reduces costs, and improves the investor experience.

For example, automation creates a smoother and more straightforward onboarding process for investors. It makes transaction risk-profiling, cash movements, and reconciliation easier and more accurate.

Automation, combined with sophisticated data management, allows for consistent and homogenous investor reporting, even in a complex multi-strategy environment.

Automated systems can also help firms track shifting global regulations. At the same time, migrating workflows and other processes to the cloud reduces the cost of maintaining IT infrastructure while enhancing security and collaboration.

The private capital technology ecosystem

With so many significant benefits, why isn’t private capital already at the front of the queue?

For many managers, technology is becoming a strategic priority. But in the world of private capital, selecting, implementing, and maintaining the right systems is far from straightforward.

Traditional technology vendors are in the business of selling solutions rather than creating ecosystems. That often leaves firms managing multiple partners and a disconnected technology stack.

To see real benefits, managers need advanced data management solutions and systems that integrate and communicate. They need a data lake or centralized repository approach that makes information accessible, configurable, and usable, regardless of platform or recipient.

Any new technology they invest in needs to slot seamlessly into this ecosystem.

The talent challenge

Technology issues aren’t insurmountable, but they require a holistic approach as well as the talent to implement them. That is an entirely different challenge. Talent is in short supply, and in recruiting terms this is a buyer’s market. Salary inflation is rife as IT, data, compliance, and ESG specialists shop around.

Outsourcing is a potential answer because the right partner can help funds close both the talent and technology gap and manage both holistically.

But in private capital, there is never a one-size-fits-all solution. This period of relative calm is an opportunity for managers to take a step back, evaluate what they have, and consider what they need to do to create the integrated and scalable automated systems they need for the near future.

Our Halo Framework research suggests that many managers are doing exactly that, and the majority agree that increasing operational efficiency is a major strategic priority. Download our full report here.


CSC provides tailored administration and strategic outsourcing solutions to support the complex operations of alternative asset managers across jurisdictions and asset types while adhering to global regulations and compliance. A market leader, we work with funds of all sizes, from start-ups to the largest and most experienced fund managers in the world. Founded in 1899, CSC prides itself on being privately held and professionally managed for more than 120 years. We are the trusted partner of choice for more than 90% of the Fortune 500® and more than 70% of the PEI 300. CSC has office locations and capabilities in more than 140 jurisdictions across Europe, the Americas, Asia Pacific, and the Middle East. We are a global company capable of doing business wherever our clients are—and we accomplish that by employing experts in every business we serve. We are the business behind business®. Learn more at