Scaling Real Assets: Operating Models for the Next Phase of Growth

Real assets investing is at a structural inflection point. A convergence of forces – including industry consolidation, investor scrutiny, regulatory complexity, and increasing demand for real-time, asset-level transparency and integrated reporting across portfolios – is reshaping what institutional investors expect and, in turn, the operating environment for real asset managers worldwide.

This is happening at a time when higher interest rates, slower exit environments, and extended fundraising cycles are putting greater pressure on firms to manage costs while maintaining operational excellence.

For decades, real assets managers built their businesses around either internally managed or heavy shadow operational infrastructure. Fund administration, investor reporting, regulatory compliance, and operational technology were considered necessary but peripheral functions supporting the core business of sourcing deals and generating returns.

This model suited an era when regulatory frameworks were simpler and operational complexity could be managed with smaller teams. In addition, portfolios were less diversified and investor expectations were considerably more limited. Today, however, the scale and sophistication of private markets, including real assets, are expanding rapidly. Preqin’s Private Markets in 2030 Report notes that global alternative assets are projected to reach $32 trillion by 2030 –– implying a step-change in the volume, complexity, and frequency of operational processes required to support these assets at scale.

Institutional investors now expect look-through reporting, cross-asset aggregation, and near real-time performance visibility, while regulatory obligations continue to expand across jurisdictions. Taken together, operating models built for lower-complexity environment are increasingly under strain.  

In response, real assets firms are reassessing how their operating models should evolve. Rather than maintaining full-service internal operational infrastructures, leading managers are exploring strategic operating partnerships that provide scalable expertise, advanced technology platforms, and global operational capabilities.

The central question is no longer whether operating models must evolve, but how quickly firms can transform to support the next phase of real assets growth without eroding margins or increasing risk.

Five Key Trends Reshaping Real Assets

1. Industry Consolidation Accelerates

Since the pandemic the private markets ecosystem has undergone an unprecedented wave of consolidation.

Major transactions – including among others the BlackRock’s acquisition of Global Infrastructure Partners, Ares Management’s purchase of GCP International, and BNP Paribas’ acquisition of AXA Investment Managers – reflect a broader shift toward scale, platform expansion and operational sophistication.

These deals are not simply about asset growth. They reflect a shift toward building global, integrated operating platforms capable of supporting increasingly complex, multi-asset investment strategies.

As firms scale, operating models designed for smaller, less complex portfolios begin to break. Fragmented manual processes, and siloed teams struggle to support global, multi-jurisdictional structures.

For managers, the cost implications can be stark.  Consolidation enables larger players to spread technology, compliance, and reporting costs across larger asset bases, while maintaining institutional-grade infrastructure.

Operational scale is becoming a form of competitive advantage — not just in deploying capital, but in efficiently supporting it.

Firms that cannot replicate these capabilities internally are increasingly exploring operating partnerships to access institutional infrastructure without fully absorbing the cost of building it.

2. Fee Compression and LP Scrutiny

Institutional allocators are placing greater emphasis on improving transparency, operational discipline, and cost efficiency, driven by significantly more rigorous operational due diligence processes. Today, LPs evaluate not only investment performance strategy but also:

• data accuracy and timeliness
• reporting transparency and granularity
• governance and control frameworks
• operational resilience and scalability

According to PwC, nearly 9-out-of 10 of asset managers report experiencing profitability pressure in recent years, driven by rising costs and fee competition.

As a result, managers are expected to demonstrate:

• transparent cost structures
• scalable reporting systems
• strong governance frameworks
• efficient operational processes

Operational infrastructure has moved from a support function to a core component of investor confidence and fundraising success.

Managers that can demonstrate robust, scalable operating models are better positioned to win allocations — not just on performance, but on institutional credibility.

3. Regulatory Complexity

The regulatory landscape for real assets has grown significantly more complex over the past decade. Managers operating across jurisdictions must navigate frameworks such as AIFMD, SFDR, and evolving US and Asian reporting requirements.

This has materially increased the burden on compliance and operations teams.

For many firms — particularly those with lean teams — maintaining in-house expertise is resource-intensive. Regulatory complexity also introduces operational risk: errors in reporting, delayed filings, or inconsistent compliance can result in fines, investor concern, and reputational damage.

As regulation evolves, firms face a structural decision: build and maintain internal regulatory capability or leverage specialist partners with dedicated expertise and global coverage.

4. Extended Fundraising and Deal Cycle

Private markets are experiencing increased volatility in fundraising and transaction activity, driven by interest rate shifts, geopolitical uncertainty, and slower exit environments.

Fundraising timelines have extended, while deal velocity has declined across key real asset segments.

However, operational obligations remain constant. Managers must still deliver investor reporting, regulatory filings, and portfolio monitoring regardless of the pace of new investment activity.

This creates pressure on management company economics. Maintaining large fixed operating infrastructures during slower investment cycles can significantly impact margins.

As a result, operating model flexibility — the ability to scale resources up or down — is becoming increasingly important.

5. Technology as a Competitive Differentiator

Technology is rapidly reshaping investor expectations across the real assets. At a minimum, institutional investors expect:

• digital investor portals
•  On-demand reporting consolidated portfolio views.

Increasingly, leading managers are moving toward:

• integrated data environments
• real-time analytics
• cross-asset reporting capabilities

Delivering this requires significant investment in data architecture, systems integration, and cybersecurity.

Many firms underestimate not just the cost of building systems, but the ongoing cost of maintaining, upgrading, and securing them.

Managers face a structural choice: invest in proprietary systems or leverage platforms purpose-built for private markets.

The Operating Model Conundrum

Rapid change is forcing real assets firms to reassess how their operating models support their strategic priorities.

Investment teams focus on sourcing deals and generating returns. However, the infrastructure supporting these activities has become significantly more complex.

Fund accounting, investor reporting, regulatory compliance, and technology now require specialized expertise and advanced systems.

Many firms built these capabilities internally during periods of growth. Over time, however, these functions have evolved into significant fixed cost centers requiring continuous investment in people, systems, and compliance infrastructure.

These functions are mission-critical — yet rarely represent true competitive differentiation.

This creates a structural tension: critical functions that are essential to operate, but inefficient to scale internally.

The Transformation Solution: Strategic Operating Partnerships

In response, firms are increasingly adopting strategic operating partnerships.

Rather than viewing operations as a cost center, leading managers are repositioning operating models as scalable platforms that enable growth, efficiency, and risk management. These partnerships can take several forms:

• operational lift-outs
• co-sourcing models
• fully outsourced operating platforms

When implemented effectively, these operating partnerships deliver benefits across three crucial dimensions:

a. For the Business

Strategic partnerships enable a shift from fixed to variable cost structures, improving margin flexibility.

They also provide access to multi-jurisdictional expertise that would be costly to build internally.

b. For the Technology Stack

Technology is often one of the most compelling drivers of operating model transformation. Operating platforms provide immediate access to advanced capabilities including:

• investor portals
• integrated reporting systems
• operational dashboards
• real-time data visibility

without requiring upfront capital investment or ongoing internal development costs.

c. For People

Operating model transformation expands career pathways for operations professionals.

Operations professionals within investment firms often work in highly specialized roles with limited career mobility. Within larger operational platforms, these professionals can gain exposure to a wider range of investment strategies, clients, and technologies.

Expanded career pathways and training opportunities can improve retention and professional development. When managed thoughtfully, operating partnerships can create positive outcomes for both organizations and the professionals supporting their operations.

Proven Success: Evidence from the Market

A growing body of evidence across the alternatives sector demonstrates the impact of operating model transformation.

• across recent transitions, firms report improved reporting speed and accuracy
• enhanced investor transparency
• stronger operational resilience

Successful transformations share common characteristics:

• strong leadership alignment
• clear communication with stakeholders
• structured transition planning

Making the Decision: A Framework for Leaders

For executives and boards evaluating operating model transformation, several core considerations should guide decision-making:

• Focus internal resources on true sources of competitive advantage. Investment decision-making and investor relationships remain core differentiators. Highly specialized operational functions can often be delivered more effectively through partners.
• Ensure operating infrastructure can scale with growth. As real assets allocations expand, operational demands increase in complexity and volume. Infrastructure must be able to scale accordingly without introducing inefficiencies or risk.
• Prioritize risk management and operational resilience. Any operating model must be supported by strong governance frameworks, deep regulatory expertise, and robust control environments.
• Plan transformation with a realistic structured timeline. Most operating model transitions are executed over a period of 12 – 18 months requiring clear planning, phased execution, and experienced delivery capabilities.
• Evaluate strategic upside beyond cost efficiency. While cost considerations are important, the broader value lies in enabling leadership teams to focus on investment performance, growth, and client relationships.

Leading Through Transformation

Real assets are entering a new phase of growth and complexity.

Rising investor expectations, regulatory demands, and technology requirements are reshaping the operational foundations of the industry.

Operating infrastructure is no longer a back-office consideration — it is a core driver of scalability, efficiency, and competitive positioning.

Firms that rely on legacy operating models risk rising costs and constrained growth.

Those that proactively transform their operating models can unlock flexibility, scalability, and sharper strategic focus.

At Alter Domus, we see operating model transformation as the move toward integrated operating platforms that combine data, technology, and specialist expertise to deliver transparency, control, and scalability at institutional scale.

As the next investment cycle unfolds, firms that align their operating models with future demands will be best positioned to succeed.