3 Ways to Improve Large-Scale Portfolio Management Visibility

3 tips for portfolio visibility

Portfolio management is particularly complex for limited partners and asset allocators such as pensions, endowments, foundations, family offices and OCIOs. These portfolios tend to be extremely data-intense and inconsistent, with multiple asset classes and currencies. These portfolios need to be managed in a strategic way over a long-term horizon. With multiple stakeholders to answer to, visibility and transparency are mission critical. But the very nature of multi-asset class portfolio management makes portfolio management visibility extremely challenging (we are looking at you alternatives!).

Whether you are on the investment team or the operations side of the business, here are 3 ways you can improve visibility and enable greater transparency across your multi-asset class portfolio.

Automate data aggregation.

The more investments and asset classes you hold, the harder it is to see the big picture. We find that many pensions, foundations and family offices are still attempting to manage data collection and data aggregation with manual techniques. Often data for each asset class is housed in a different system across a variety of fund managers. The burden is on the operations team to extract this data and manually piece it together using spreadsheets or other reporting tools and attempt to deliver an accurate picture to the investment team. This approach limits the speed, accuracy and scope of investment information – and makes holistic visibility extremely difficult. If you step out of your reality and think about it, managing a multi-billion dollar portfolio this way verges on insanity. Organizations are so used to the status quo, that they just live with it. But there are better options. Visibility can be dramatically improved by implementing a technology platform that accelerates data collection and automates data aggregation. Look for a cloud-based platform that was designed for institutional investors and created by a solution provider that truly understands the needs of limited partners and asset allocators. Look for a platform that has invested heavily in artificial intelligence and machine learning, while also providing human capital backup and processes necessary to ensure exceptions are handled properly.

Implement a bottom up approach to reporting and analysis.

Typically, portfolio management systems are built with a top-down view. This seems logical for delivering visibility, but in reality it limits your ability to really drill down and analyze multiple asset classes. It can also result in an outdated view of reality when data is not collected and aggregated in lock step. We believe it’s time to turn this world upside by implementing a platform that takes a bottom-up approach to reporting and analysis. This bottom up approach enables data to be displayed, modeled and analyzed from any viewpoint – giving you much greater insight and power over investment analysis. Achieving true visibility is not only about the big picture, but also your ability to understand how each asset class plays into your overall strategy and to model changes on the fly to assess impact on risk, liquidity and exposure. You’ll be amazed at how visibility is transformed with a bottom up approach to reporting and analysis.

Encourage data sharing across your investment ecosystem.

In today’s world, you have all kinds of information at your fingertips and can get near real-time alerts on pretty much any news that interests you. Yet, you continue to be at the mercy of your general partners (GPs) in getting visibility into fund data. Timing, degree of detail and sometimes accuracy vary depending on the GP. This makes it extremely difficult to keep a daily pulse on your portfolio as a whole, clouding visibility and limiting your ability to optimize investment decisions. In an ideal world, technology would enable each of your GPs to expose a real-time, web-based view of the investment information that matters most to you. This would allow you to access it at any time and automatically feed the data stream into your portfolio management platform. If this appeals to you, you’re not alone. Greater LP/GP transparency has the power to deliver a level of visibility that could be a game changer.

At Solovis, delivering fintech innovation that transforms institutional investment management for pensions, endowments, foundations, family offices, OCIOs and other limited partners is our #1 mission.

Contact us to learn more about how the Solovis platform can deliver better portfolio management visibility through automated data aggregation, bottom up reporting and greater LP/GP transparency.