The rapid growth of private markets is making it harder for fund administrators to manage data, according to new research.A report by AI data platform Accelex and enterprise solutions provider FactSet interviewed senior executives from 16 fund administration firms, collectively managing over $13tn (£10.5tn) in assets under administration.
It found that 55 per cent of fund administrators consider data acquisition and data governance to be their primary operational issue, citing concerns about data availability, accuracy and timeliness.
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The growth of private markets was cited as a key factor in this challenge, due to the inclusion of retail investors and the growth of private credit.
The respondents said that these trends have increased data volume, complexity and reporting demands.
Fund administrators are looking to AI to solve these issues, with some respondents reporting that AI technology has reduced data processing times by up to 80 per cent with almost perfect accuracy.
“The fund administration industry is at a pivotal moment, where balancing operational efficiency with exceptional service quality has never been more critical,” said Michael Aldridge, president and CRO of Accelex.
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“As private markets expand and regulatory demands rise, administrators face mounting challenges in data governance, a cornerstone of compliance, scalability, and client reporting. By streamlining workflows, enhancing accountability and meeting complex regulatory requirements, AI-driven data governance empowers administrators to build trust, foster transparency, and position themselves as leaders.”
David Mellars, senior vice president and senior director of buy-side middle office product management at FactSet, added: “Private markets’ rapid growth has fundamentally reshaped the demands of the buy-side, including fund administrators, driving a need for more timely and accurate data. Better tools will help all market participants overcome data quality challenges, reduce inefficiencies, and meet rising client expectations with precision and confidence.”
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