Blog
From Fund Administration to Operating Intelligence: Why Private Markets Need a New Operating Model
Private markets firms are scaling faster than their operating models. A new approach to operating intelligence is becoming essential to support better decisions, stronger governance, and long-term growth.
Charlotte Hogg
Chief Executive Officer
March 5, 2025
In my recent whitepaper on the Operating Intelligence – A New Opportunity for Investors, I explored a structural challenge emerging across private markets: as firms scale, their data, governance and operational infrastructure often fail to scale with them.
That paper focused on the nature of the issue — the limits of legacy operating models.
But stepping back as CEO, I believe the implications run deeper still. The problem is not simply operational inefficiency. It is becoming a strategic fault line.
So here is a broader perspective on what operating intelligence now means for leadership, resilience and competitive differentiation in the next phase of private markets.
Over the past decade, the industry has matured at extraordinary speed. Firms have expanded across strategies, geographies and products. LP expectations have risen. Regulatory scrutiny has increased. And the pace of decision-making has accelerated.
Yet behind the performance, many operating models still look remarkably familiar.
For too long, the operational layer of private markets has been treated as a necessary function. Something to manage. Something to outsource. Something to keep running in the background.
This paradigm is coming to an end. As private markets scale, operating models are no longer a back-office concern. They are becoming a strategic advantage.
Complexity is not new. The consequences are.
Private markets have always been complex. Cross-border structures. Multiple entities. Different reporting requirements. Unique fund terms. Asset-level nuance.
What has changed is the scale at which that complexity now operates.
Many firms are running more funds, across more strategies, with more portfolio companies and more investors than ever before. They are expected to deliver faster reporting, deeper transparency, and stronger governance.
And they are doing this while operating in a world where data is everywhere, but insight is not.
The result is simple: private markets firms are being asked to make faster decisions, with greater confidence, across a much more complex environment.
The real challenge is coherence
Most firms don’t have a shortage of information.
They have too many systems, too many workflows, and too many disconnected sources of truth.
Information exists across fund accounting, portfolio reporting, investor communications, loan administration, and multiple third-party platforms. But too often it is fragmented, delayed, and difficult to connect.
In practice, that means teams spend time reconciling rather than understanding. Reviewing rather than anticipating. Explaining rather than acting.
And crucially, it means insight can arrive too late to influence the decisions that matter most. This is not a technology issue alone. It is an operating model issue.
Fund administration is evolving
Fund administration has historically been defined by execution.
Accurate books. Timely closes. Reliable reporting. Strong controls. Professional service. Those fundamentals remain non-negotiable.
But today, what firms need from their operating partners is expanding.
They need visibility across their business, their funds and their portfolios – delivered with speed and accessibility.
They need insight that reflects how they actually invest. Insight that aligns with their strategy, their structures and their competitive strengths.
They need operating models that support decision-making, not just reporting.
They need earlier signals. Less reconciliation. More forward-looking clarity. This is where fund administration begins to shift from service delivery to operating intelligence
Intelligence is not a dashboard
When we talk about intelligence, we do not mean another portal or another layer of generic reporting.
We mean something more fundamental: the ability to bring together data, workflows, and expertise into a single coherent operating view.
True intelligence identifies exceptions early, reduces friction, and delivers insight at the exact point where decisions are made – tailored to a firm’s strategy, risk appetite, and investment approach.
That means a firm’s intellectual property must be embedded in the insights themselves. And critically, intelligence combines technology with human expertise to strengthen governance, reduce risk, and support scale.
This is not a shift driven by fashion. It is driven by necessity.
A new role for operating partners
As the industry evolves, the relationship between GPs and service providers must evolve too.
The future belongs to operating partners, not transactional vendors.
Partners who understand the realities of private markets. Who can deliver consistently across strategies and geographies. Who can help simplify what can be simplified, standardize what must be standardized, and build trusted foundations beneath every process.
And who can use modern technology to help firms operate with greater clarity, confidence, and resilience.
What comes next
Private markets firms will continue to grow. Complexity will continue to increase. Expectations will continue to rise.
The firms that thrive will be those that build operating models designed for what comes next.
Operating models that support decision-making, not just reporting. Operating models that reduce risk, not just process it. Operating models that scale without breaking.
At Alter Domus, we believe fund administration is becoming something bigger: the operating infrastructure of private markets. A crucial source of data and insights to drive value for investors
And our responsibility is to help our clients shape that future.
Not by adding noise. But by bringing clarity.
Not by replacing expertise. But by amplifying it.
Not by offering more tools. But by building a better operating model.
Because in the next era of private markets, performance will always matter. Expectations will rise.
For us as fund administrators, the bar is rising even more. Great service and a relentless focus on delivering new sources of value will matter even more.
Podcast
Regulation Meets AI: The Transformation of Private Credit Reporting
Our inaugural episode of our Alter Domus Podcast features Tim Ruxton and Curtis Beyer in conversation with Thomas Morris, CEO of The Reporting Company, discussing how AI-enabled workflows for private credit and CLO regulatory reports provided by Alter Domus are reducing this process from hours to minutes, improving validation accuracy, and strengthening data integrity without sacrificing human oversight.
Thomas and the team examine everything from cross-border regulatory pressures, data fragmentation and common taxonomies, AI mapping and validation in production environments, and the strategic decision to build internally or partner.
Tim and Curtis also explore what this shift means for private credit operating models−and the strategic decisions firms can no longer postpone. The conversation moves beyond technology to the competitive implications of getting reporting infrastructure right.
Watch below or on directly on Youtube or Spotify.
In candid conversations with GPs, LPs and industry partners across private equity, private credit and real assets, we unpack the trends reshaping the industry – from AI and data transformation to regulation, scale and evolving operating models.
If you’re building, scaling or rethinking your organization, this is the conversation you need to hear.
Subscribe today to gain early access to each new episode of the Alter Domus Podcast Cast.
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Analysis
Operating Intelligence… A New Opportunity for Investors
The hallmark of private markets has always been its complexity. Every investment, and every fund, is unique. That’s made the operations complex and virtually impossible to wrestle actionable intelligence from. No longer. We believe that technological innovations, combined with in-house expertise at fund administrators like ourselves should deliver data and insights that will be invaluable for investors and operators alike.
We have to evolve from being execution focused service providers to partners focused on enabling scale and complexity and providing the data and insights for managers to make better informed strategic decisions.
Alter Domus is committed to that journey of partnership and is investing against that vision.
Charlotte Hogg
Chief Executive Officer
February 27, 2026
The scale shift reshaping private markets
Change is sweeping through the private markets industry. Fundraising is concentrating into fewer hands. Manager consolidation is running at all-time highs. Regulatory and reporting demands are intensifying. The need for speed and access to data will continuously increase.
These shifting market dynamics are forcing GPs to reappraise how they remain relevant and competitive.
Success in private markets has always been grounded in investment intelligence – the ability of a manager to map markets, source proprietary deal flow, conduct due diligence on assets and establish a valuation. If a manager bought the right asset at the right price, the rest would take care of itself. GPs have invested in their firms accordingly, sticking to the proven formula for success: grow the front office deal team, secure new deals, and keep operations lean.
But while this model has served managers well for years, the asset class has reached a size and complexity where operational intelligence should start to complement exceptional investment intelligence. A virtuous circle of real time outcomes informing real time decisions. Technology and data in place of manual brute force.
The operating intelligence gap
Today’s private markets industry is operating on a totally different scale to 20 years ago. Alternative assets under management (AUM) have grown from US$3.1 trillion in 2008 to more than US$16.7 trillion in 2024, according to Preqin, and are forecast to reach US$30 trillion by 2030.
Growth in AUM has meant more data for GPs to manage, across more funds and more strategies. Operating models that sufficed in the 2000s (and characterized by fragmented systems and service providers) are no longer fit for purpose.
Managers that used to engage with LP clients almost exclusively through 10-year, closed-ended commingled funds now offer investors separately managed accounts (SMAs), co-investments and sidecar arrangements. The emergence of the non-institutional investor channel, accessed through evergreen and feeder fund structures, brings added layers of complexity, but can’t be ignored, with Pitchbook forecasting that in the US alone evergreen assets will more than double by the end of the decade to reach north of US$1 trillion.
Simultaneously, there has also been a step-change in LP expectations around the detail and frequency of GP reporting. Investors are seeking timely, credible information that enables them to manage liquidity and assess private markets performance relative to other asset classes in real time.
Operations teams built to service quarterly reporting cycles with backward-looking performance reviews will have to evolve if their firms are to meet the expectations of investors.
GPs will have to respond by upgrading their operational intelligence capability – and not only to cope with greater transaction volume, but also greater complexity. Recent technological innovations, notably AI, mean the industry’s time for change is now.
It is time to gear up for sustained investment in technology: a flexible, cloud-based infrastructure; best-of-breed tools across all asset classes and processes; functionality and analytics layered over software; AI models and agents that accelerate and sustain workflows and security by design.
Let’s build for a world where GPs and LPs will access fund administrators’ data and insights directly, through data exchanges, via machine-to-machine connectivity and APIs. The need for speed and flexibility will only increase.
From fund administrator to operating partner
Fund administration provision was also fragmented by jurisdiction, service line and asset class. Providers played to their strengths and stuck to their niches. GPs did see benefit in best-of-breed expertise, but as fund sizes grew and managers branched out into more jurisdictions and investment strategies, fund administrator relationships morphed into a messy patchwork of myriad relationships that became more difficult for GPs to control as their organizations sought scale.
GPs are now actively looking for opportunities to consolidate their relationships and work with outsourcers who can provide a full basket of services that straddle asset classes and geographies. A recent Alter Domus survey showed that 60% of GPs already preferred bundled services, with this proportion expected to climb to 70% in the three-to-five-year period following the initial survey.
The upshot for fund administration is that the industry must change to reflect the change in its GP client base.
In the future, the fund administration industry will be comprised of fewer, but larger firms, that have the bandwidth to cover all of a manager’s operating requirements, as opposed to the old industry model of fragmented service providers operating in their own data and service-line siloes.
This will demand a reappraisal of how service providers think about themselves and make a shift from serving as arms-length fund administrators doing the mundane back-office work on the GP’s behalf, into embedded operating partners who work closely with managers to provide operational intelligence that informs how GPs should grow and invest.
Deepening relationships
Operating partners will become integral to how firms are run and the data they depend on to invest. This is a serious undertaking for both parties, who will have to work closely on technology integration and share responsibility for governance.
Operating partners will also be expected to be at the forefront of regulatory, technology and investor relations trends, and to leverage their global networks, in-house technology expertise and financial reporting knowledge to provide their clients with a single operating view across all of their investment strategies, LP relationships and fund structures.
For GPs these partnerships will extend beyond a helping hand with administrative tasks and back-office housekeeping.
The data and analysis operating partners produce will be what managers count on when seeking insight and making decisions. GPs will no longer choose services from a menu of options provided by service providers but will seek out operating partners who understand what GPs are trying to achieve, and how to facilitate it.
It will be down to the operating partner to accelerate reporting timelines, identify underperforming assets earlier, empower risk and investment committees with insight, and give managers a foundation allowing them to scale without their operations splintering.
A model for the future
For me, this is no longer a debate about modernization. It is about competitiveness.
As private markets continue to scale and consolidate, operational strength will increasingly determine strategic freedom — the ability to launch new structures quickly, enter new jurisdictions with confidence, integrate acquisitions effectively, and provide investors with clarity in real time.
At Alter Domus, we are building our business around that reality.
We partner with managers at every stage of scale — from global multi-strategy platforms navigating complexity across asset classes and jurisdictions, to high-growth firms building the operational foundations for their next phase of expansion. The operating intelligence challenge looks different at each stage, but the imperative is the same: operations must enable ambition, not constrain it.
We are reshaping our operating model to connect data across asset classes and geographies, accelerate reporting cycles, and enable insight to move at the pace of decision-making. We are investing in automation and AI to reduce friction and deliver portfolio-level visibility that supports both governance and growth.
But this evolution is not about systems alone. It is about partnership.
The managers who will succeed in the next decade will be those who treat operations as a strategic capability – and who choose operating partners prepared to scale with them.
The operating intelligence gap can be closed.
We are ready to lead – and ready to partner.
Insights
Event
Ipem Wealth Cannes
New sources of capital require new standards.
Private markets are opening to private wealth. But “democratisation” is an operational challenge. High volume. Smaller tickets. Digital reporting.
The asset class is changing. The infrastructure must adapt.
Alter Domus is at IPEM Wealth Cannes (04-05 Feb). Michael Muyiwa-George, Enkela KOSTURI, and Patrick GIOVANSILY are on the ground.
Ask them how we can help you build the bridge between private wealth and private assets.
hashtag#IPEMWealth hashtag#PrivateWealth hashtag#PrivateEquity
Key contacts
Enkela Kosturi
Luxembourg
Director, Sales & Relationship Management
Michael Muyiwa-George
United Kingdom
Sales Director, Private Equity
Patrick Giovansily
France
Director, Sales France
More events
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Event
New York Forum
Tech is not a cost. It is an asset.
We are sponsoring the Private Funds CFO New York Forum.
On Feb 3rd, Patrick Krajci speaks on the panel: “Financial Technology That Delivers: Measuring ROI from Tech Adoption.” He will dissect the difference between tools that look good and tools that work.
Joining him: Devin Vasquez, Emily Inman, and Tim Toska.
Get in touch with them today.
#PrivateFundsCFO #FinTech #OperationalEquity
Key contacts
Tim Toska
United States
Global Sector Head, Private Equity
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Analysis
Accelerating fund onboarding: 7 best practices to impress new LPs
A fund’s onboarding process is one of the earliest signals Limited Partners (LPs) get about how your firm operates. If intake feels disorganized, slow, or repetitive, it creates doubt long before the first capital call. If it is clear and predictable, it builds confidence fast.
Onboarding has also become more demanding. Investor expectations are higher, and KYC and AML requirements remain complex. In Fenergo’s 2024 survey of more than 450 Tier 1 asset management firms, 74% said they had lost a client due to slow or inefficient onboarding.
Below is a practical playbook to shorten timelines, reduce rework, and deliver an onboarding experience that matches institutional standards.
Why a Smooth Onboarding Process Matters to LPs
LP operations teams juggle multiple managers, vehicles, and reporting cycles. They want onboarding that is efficient, auditable, and consistent.
A well-run process supports two outcomes that matter to LPs and regulators:
Regulators have shown they will act when a private fund manager’s onboarding controls do not match what it tells investors.
In January 2025, the SEC charged Navy Capital Green Management with misrepresenting its anti-money laundering due diligence to private fund investors and found instances where the firm accepted subscriptions without consistently completing the identity, beneficial ownership, and AML documentation steps described in its investor materials.
The takeaway for fund onboarding is straightforward: your process needs an evidence trail that proves what you collected, what you verified, what you approved, and when.
Pre-onboarding prep: get internally ready
Speed comes from clarity, not urgency. Before you try to move faster, reduce avoidable friction inside your own team.
7 best practices for faster fund onboarding
Many delays come from manual work that is easy to standardize. Focus automation on tasks like:
- Pre-filling subscription documents using known investor data
- Triggering checklists based on investor type and geography
- Routing documents for review with time stamps and audit logs
Automation does not remove judgment. It removes busywork and makes outcomes more consistent.
Email creates version-control issues and forces LPs to hunt through threads. Using a secure investor portal solution centralizes intake and communication, providing a cleaner audit trail.
Many fund managers rely on their fund administrator’s technology stack to support this, helping ensure onboarding workflows are consistent, secure, and aligned with operational and compliance requirements.
At a minimum, the portal should let LPs:
- Upload documents securely
- See exactly what is outstanding
- Confirm what has been received
- Ask questions in one place
This is also where you can reinforce a professional, branded experience without adding complexity.
Most firms do not struggle with intent. They struggle with inconsistent execution across teams, funds, and investor types.
Create a KYC and AML package that is:
Where possible, align your checklist with your fund administrator or other providers to avoid duplicate requests. LPs feel friction most when multiple parties ask for the same information in slightly different formats.
Every onboarding needs a quarterback. Without one, tasks drift between investor relations, compliance, legal, and the administrator.
The onboarding owner should:
- Run a kickoff call for complex subscriptions
- Own the tracker, timeline, and escalations
- Coordinate inputs across internal teams and providers
- Keep communications clear and consistent
This role is especially important when you are onboarding multiple entities under one LP umbrella, or when side letter terms add custom steps.
LPs want clarity, not noise. Your update cadence should match complexity.
A simple segmentation model works well:
Keep the writing direct. Confirm what you received. State what is next. Name the blocker if there is one. That alone reduces follow-ups.
Even with a portal, many LPs still want a quick view of progress. Transparency reduces uncertainty and cuts down on ad hoc check-ins.
Give LPs a milestone view that mirrors your internal workflow, such as:
- Documents received and validated
- KYC and AML review in progress or complete
- Subscription accepted
- Wire instructions verified
- Final close readiness
Whether this lives in the portal, a weekly digest, or both, consistency matters more than format. The goal is simple: LPs should never wonder where things stand.
Institutional LPs are used to SLAs across their operating stack. Onboarding is no different, especially for repeat allocators.
Offer realistic SLAs that cover:
- Document review turnaround times
- KYC and AML review timeframes
- Response time for questions
- Wire verification steps and timing
Do not overpromise. A credible SLA that you meet builds trust. An aggressive one you miss creates frustration and escalations.
How to measure onboarding success
If you are not measuring, you are guessing. Track a small set of metrics that reflect both speed and quality:
Also, capture qualitative feedback. A short post-close note to the LP operations contact often reveals where friction really sits.
Putting it all together
A faster onboarding process is not about cutting corners. It is about designing a workflow that is consistent, transparent, and aligned with institutional expectations.
Start by tightening internal ownership and your source of truth. Then reduce avoidable manual work. Finally, raise transparency so LPs can self-serve status and avoid repetitive follow-ups. Do those three things well, and onboarding becomes a strength, not a bottleneck.
Make onboarding one less thing your team has to chase. Connect with Alter Domus about fund administration services to streamline the fund onboarding process, standardize KYC and AML reviews, and give LPs clear, real-time transparency from subscription through close.
Insights
News
Fund governance best practices to satisfy limited partner and regulator scrutiny
Strong fund governance is not a paperwork exercise. In private funds, it is the operating system that keeps decision-making disciplined, conflicts visible, and stakeholders aligned. As private funds scale, expectations rise too. Limited partners want confidence. Regulators want evidence.
Why strong governance is non-negotiable in private funds
Private funds are often more bespoke than public vehicles, and they rely heavily on contractual terms for oversight and management. That flexibility is valuable. It can also create gaps if processes are unclear, inconsistently applied, or poorly documented.
Three forces make fund governance standards especially important right now.
First, enforcement has reinforced how costly weak controls can be. In fiscal year 2024, the U.S. Securities and Exchange Commission filed 583 enforcement actions and obtained $8.2 billion in financial remedies. The headline numbers are broad, but the takeaway for private fund managers is direct: conflicts, disclosure, and documentation still matter, and they need to be provable.
Second, strategies and structures have become more complex. Continuation vehicles, co-investments, NAV-based facilities, and hybrid mandates can create gray areas in allocation, valuation, liquidity planning, and approvals. Governance helps define the rules before a transaction forces decisions under pressure.
Third, governance shapes the investor experience. Timely reporting, consistent approvals, and clear escalation reduce friction. That is especially true during audits, fundraising, and major portfolio events, when questions arrive quickly and stakeholders expect fast, consistent answers.
What institutional limited partners expect from fund governance
Institutional limited partners vary, but expectations tend to converge on a few themes.
Clear conflict management
Many limited partners look to the Institutional Limited Partners Association (ILPA) Principles as a benchmark. ILPA highlights that conflicts may require limited partner advisory committee (LPAC) approval, and that disclosure alone should not automatically make a conflict acceptable.
In practice, managers benefit from a conflict register, a defined approval path, and minutes that capture the decision and the rationale.
LPAC effectiveness
An LPAC should have a clear remit and operating rhythm. Typical areas include conflicts, related-party transactions, valuation policy oversight, and select expense approvals. A strong LPAC process also reduces “back-channel” questions because investors know there is a trusted forum for sensitive topics.
Reserved matters and voting mechanics
Map decisions that require investor consent and make the mechanics operational. Ambiguity here is expensive. It can delay time-sensitive transactions, complicate closings, and create avoidable negotiation late in the process.
Independence where it matters
Independence may mean independent directors in certain jurisdictions, third-party valuation input for harder-to-price assets, or independent review of specific transactions. The goal is credible challenge and defensible outcomes, not governance for its own sake.
Supporting governance bodies
Many managers benefit from a compliance and risk forum that meets monthly, even if informal. Use it to review incident logs, policy exceptions, upcoming disclosures, and operational risks that cut across functions.
Enhancing oversight with clear documentation
Fund governance standards are only as strong as the records that support them. Documentation is not about volume. It is about traceability, so decisions can be reconstructed quickly and confidently.
Strong documentation is also easier to maintain with the right operating model and fund regulatory reporting services support.
Codify the policies investors ask about most
Start with conflicts of interest, valuation, fees and expenses, side letters, and material non-public information handling. Assign an owner and a review cadence. If a policy does not reflect how the team actually operates, update it. A policy that is ignored is a liability.
Build side letter governance into the process
Track side letter obligations centrally and tie them to workflows. If a reporting promise is made to one investor, the team should be able to deliver it reliably. The team should also be able to assess whether it creates operational or fairness risks for others.
Create an escalation framework that fits the fund’s risk profile
Define severity tiers and triggers for LPAC notification, investor communication, or external counsel engagement. Then test it. Tabletop exercises can surface gaps early, when fixing them is cheap.
Make disclosure workflows repeatable
Align the calendar for quarterly reporting and annual audits. Track exceptions and recurring investor questions. Then use that feedback to strengthen governance over time. Small improvements here reduce quarter-end fire drills and improve consistency across funds.
Aligning governance with ESG and Risk Management
Good fund governance connects ESG to the same control environment that governs valuation, liquidity, and conflicts. That means clear ownership, defined metrics, and validation.
Set ESG governance roles early
Decide who owns the ESG policy, who owns data collection, and who signs off on reporting. If portfolio companies are expected to deliver data, define timelines, formats, and quality checks.
Integrate ESG into risk management
Many ESG issues show up as operational risk: safety incidents, cybersecurity, supply chain exposure, regulatory change, and climate-related physical risk. Define how these risks are monitored and escalated, alongside financial risk.
Govern technology like any other control
Many ESG issues show up as operational risk: safety incidents, cybersecurity, supply chain exposure, regulatory change, and climate-related physical risk. Define how these risks are monitored and escalated, alongside financial risk.
Bringing it together
Fund governance is how you turn promises into proof. For chief operating officers, chief financial officers, and compliance leaders, it is also a lever for speed. When decision rights are clear and records are reliable, issues are resolved faster, and investor conversations are easier to manage.
A pragmatic next step is to pressure-test your current framework against the moments that matter most: a conflicted transaction, a valuation challenge, a key person event, or an investor disclosure question on a tight deadline. If your team cannot point to the policy, the owner, and the approval path in minutes, that is a signal to tighten the system.
Learn more about Alter Domus fund governance services.
Insights
Analysis
The GP response to changing LP allocation strategies
As LPs adopt more sophisticated allocation models and heightened expectations for transparency, technology, and diversification, GPs must rethink how they operate, engage investors, and deliver performance.
In Part 2 of this analysis, Alter Domus examines how leading managers are adapting their infrastructure, liquidity approach, and asset expertise to meet this new era of institutional expectations.
A shifting LP landscape demands an evolved GP response
A challenging macroeconomic backdrop and a more sophisticated approach to private-markets portfolio construction are transforming how LPs structure their investments. As outlined in Part 1, LPs are now operating with greater precision — seeking diversification, liquidity, and data-driven performance visibility.
GPs must now match this sophistication with operational precision, technology-driven efficiency, and a sharper investor narrative.
LPs are more demanding when it comes to investor reporting and GP operational capability, and more precise about the geographic and risk-reward exposure of the funds and investment strategies they back.
To remain relevant, GPs can no longer rely solely on track record and relationships. They must demonstrate infrastructure maturity, institutional-grade processes, and the ability to anticipate LP needs before they are voiced.
As the underlying reasons driving LP allocation decisions continue to evolve, GPs must show they can adapt at the same pace — not by simply adding products, but by redesigning how they create, deliver, and communicate value.
The GP response: turning challenges into competitive advantage
At Alter Domus we have identified four key areas for GPs to address in order to remain in tune with evolving LP expectations:
Level up technology
Implementing integrated, best-in-class technology infrastructure has become the bedrock for any GP aiming to meet the operational and reporting sophistication now required by LPs.
Technology-enabled managers can transform operational agility — automating core functions, enhancing data transparency, and freeing teams to focus on performance rather than process.
Beyond efficiency, technology has become a signal of credibility. LPs now associate digital maturity with governance strength and risk control — both essential to institutional trust.
Develop global reach
The LP base is becoming increasingly diverse and globally distributed. Investors are seeking differentiated risk-return exposures across geographies — from North America to Europe and Asia — creating new demands on GPs’ operational infrastructure.
For GPs, global operational reach is no longer optional — it is a prerequisite for credibility. Managers that can provide consistent reporting, compliance, and investor servicing standards across jurisdictions will differentiate themselves in an increasingly competitive fundraising market.
Building up global investor servicing in-house is operationally challenging and capital intensive. GPs who can provide a global network for fund servicing capability will be at a distinct advantage in a competitive fundraising market.
Facilitate liquidity
A manager’s ability to proactively manage liquidity has become a defining factor in securing investor confidence and capital commitments.
As exit volumes slow, distributions to LPs have fallen, leaving investors cash-constrained and selective.
With distributed-to-paid-in (DPI) ratios now central to allocation strategies, GPs that can dilute their demands for liquidity from investors, and expedite distributions through alternative channels, will stand out from the crowd. The ability to maximize the use of fund finance and GP-led secondaries markets will be key tools for achieving these strategic objectives.
Fund finance can be used in myriad ways to optimize liquidity for managers and LPs. NAV lines can be used to speed up distributions but also serve a more prosaic function of simply reducing the requirement to make capital calls or seek fund extensions to secure additional support for portfolio companies. Fund finance facilities can also be used to finance GP commitments at time when LPs are expecting larger commitments and manager cash flows have been constrained because of prolonged hold periods.
Harness asset-specific know-how
Investors are taking a more targeted approach to constructing their private markets portfolios, which increasingly contain a mix of private markets strategies.
Some GPs have already successfully branched out into adjacent strategies like private credit and secondaries, and there remains a window of opportunity for GPs to expand their franchises by launching new strategies that align with LPs’ growing appetite for diversification.
However, adding a new strategy introduces not only additional operational demands but also the need for asset-specific expertise. A private credit fund, for example, will require systems that can calculate and collect interest payments and track covenant tests and loan amortization. Infrastructure strategies require the capacity to forecast and manage long-term capital calls and complex pricing arrangements.
Ultimately, the GPs best positioned for success will be those able to scale their platforms efficiently while maintaining the precision, transparency, and discipline that LPs now expect across every asset class.
How Alter Domus enables the next generation of GPs
The evolution of LP expectations — from technology and transparency to liquidity and diversification — is forcing GPs to elevate every part of their operating model. Alter Domus partners with managers to make that transition achievable.
Through our global platform of more than 6,000 professionals across 23 jurisdictions and the administration of 36,000 client structures, we provide the infrastructure, data precision, and multi-asset servicing expertise that help managers operate at institutional scale.
Whether upgrading technology stacks (such as Allvue, eFront, Private Capital Suite or Yardi), streamlining reporting workflows, or managing NAV and fund-finance structures, Alter Domus helps GPs build operational resilience and investor trust.
Our regulatory fluency, local presence, and deep understanding of LP priorities allow us to support clients as they expand into new geographies, launch diversified strategies, and strengthen liquidity management — all while reducing the cost and complexity of doing so in-house.
By embedding scalable processes and data discipline into our clients’ operations, Alter Domus enables GPs to focus on what matters most: delivering performance, building durable LP relationships, and positioning their franchises for long-term success.
What this means for GPs
The changing drivers of LP allocation strategies present an opportunity for GPs. Managers who understand shifting LP priorities and respond proactively can gain an edge over peers who are slower to adjust.
However, success will depend on more than investment performance — it will require a robust operational backbone that can sustain the growing complexity of global portfolios and multi-asset strategies.
Alter Domus’ global footprint, technical expertise, and asset-specific servicing capability position us to help GPs meet this higher standard — turning operational excellence into a genuine competitive advantage.
Conclusion
Shifting LP allocation priorities are raising the bar for how GPs operate, not just how they invest. As portfolios become more complex and capital more selective, operational capability has become central to credibility, scalability, and fundraising success. GPs that align technology, liquidity management, global reach, and asset-specific expertise will be best positioned to meet evolving LP expectations and compete in the next phase of private markets.
Insights
News
AIFMs Explained: Core Duties and Rules
Explore the the role of the AIFM within the AIFMD framework and how it supports transparency, control, and investor protection across alternative investment structures.
Private market strategies are getting more sophisticated, and regulators have tightened expectations around governance, transparency, and oversight. Across Europe, net assets of UCITS and AIFs ended 2024 at EUR 23.4 trillion. That scale helps explain why compliance teams, legal counsel, and EU-based GPs face increasing scrutiny around accountability, especially when structures and service providers span multiple jurisdictions.
In the EU, that accountability is typically anchored by the alternative investment fund manager (AIFM) under the Alternative Investment Fund Managers Directive (AIFMD).
AIFMD is not a checklist to memorize. It is an operating framework that shapes how you manage risk, oversee delegates, report to regulators, and protect investors.
What is an AIFM and why does it matter?
An alternative investment fund manager is the regulated entity responsible for managing one or more alternative investment funds (AIFs). This includes core functions such as portfolio management and risk management, plus broader oversight obligations. In practice, the AIFM is the party regulators look to for clear answers on controls, delegation, reporting quality, and governance.
That clarity matters most for cross-border activity. The AIFM model standardizes expectations across EU member states and provides a consistent basis for supervision.
What is an AIFM and why does it matter?
Private equity and real estate structures often create operational complexity, not just legal complexity. Valuation frequency varies by asset type, cash flows can be uneven, and delegation chains can be long. AIFMD recognizes this reality by requiring oversight that can stand up to regulatory review even when tasks are outsourced.
For professional investors, strong AIFM oversight is also a due diligence signal. A well-designed model reduces key-person operational risk and can make fundraising conversations smoother.
If you want to see how operating support is typically structured by strategy, explore Private Equity Fund Services and Real Estate Fund Services.
Core Duties of an AIFM
Most AIFM duties sit in three areas: risk management, portfolio management, and compliance. The setup varies by strategy and jurisdiction, but one principle is constant: delegation does not remove responsibility.
Risk management
AIFMD expects risk management to be structured, independent, and provable. The AIFM should maintain risk policies, monitor limits, and document how risk controls are kept appropriately separate from portfolio decision-making.
In private equity, this often translates into concentration monitoring, pipeline governance, and consistent assessment of value-creation and downside risk across portfolio companies. In real estate, it can mean stress-testing assumptions tied to occupancy, refinancing, and liquidity timelines.
Portfolio management
Portfolio management is the investment decision framework and the discipline of staying within the fund’s mandate. Under AIFMD, the AIFM is accountable for this function directly or through delegation arrangements that still require oversight.
Delegating to an investment manager can be efficient, but it can also create blind spots if responsibilities and controls are unclear. Effective AIFM oversight typically includes:
- Monitoring investment guideline compliance and breach handling
- Tracking conflicts of interest and personal account dealing controls
- Reviewing delegate performance and resourcing
- Maintaining clear escalation and remediation processes
Compliance
Compliance spans governance, policies, conflict management, and regulatory obligations, especially reporting. That is where aligning fund administration and AIFM responsibilities can help—particularly when reporting inputs, valuation workflows, and service-provider monitoring need to connect cleanly across teams. To see how Alter Domus frames this operating approach, visit AIFM Services.
Regulatory Requirements of AIFMD
AIFMD requirements tend to surface through recurring workstreams that drive compliance calendars, audit questions, and regulator engagement.
Reporting
Transparency reporting is a core AIFMD obligation. ESMA’s guidelines explain how reporting should be approached and interpreted, including reporting frequency and the information expected under the Directive.³
Many firms use “Annex IV reporting” as shorthand, but the real challenge is operational: data must be consistent, traceable, and reviewable. Legal and compliance teams need defensible sign-offs supported by documented controls. The UK FCA’s guidance on Annex IV reporting is often used as a practical reference point for how these obligations are handled in supervisory contexts.
Depositary
AIFMD includes a depositary framework intended to strengthen oversight and asset safeguarding. In private assets, the mechanics differ from traditional custody, but the governance expectations still apply.
For private assets, the mechanics differ from traditional custody, but the governance expectations still apply. For context on how depositary support can be structured operationally, see Depositary Services.
Leverage
AIFMD requires a clear approach to leverage, including how it is calculated, monitored, and disclosed. For hedge funds and certain real estate strategies, this can be a central risk topic. For private equity, leverage may be more indirect (for example, through portfolio company financing and fund-level facilities), but leverage governance still needs to be clear and documented.
Valuation rules
Valuation is a consistent focus area in private markets, especially in volatile periods. AIFMD emphasizes valuation policies, governance, and appropriate independence.² It does not mandate one methodology. It does require that your process is repeatable, controlled, and supported by evidence that an auditor or regulator can follow.
AIFM vs. Fund Manager: What’s the Difference?
This distinction matters in cross-border AIF structures:
- The AIF is the fund vehicle.
- The investment manager (or adviser) may make day-to-day investment decisions.
- The alternative investment fund manager (AIFM) is the regulated entity with overall responsibility under AIFMD, including oversight of delegation and compliance with the Directive.
A common misconception is that the AIFM replaces the investment manager. In many models, the investment team retains its investment role, while the AIFM provides the regulated framework and supervisory controls that regulators expect.
Do you need to appoint and AIFM?
Often, yes. Whether you need a fully authorized AIFM depends on your structure, fund domicile, and whether you fall within exemptions.
Thresholds and exemptions
AIFMD sets thresholds commonly used to assess “sub-threshold” status. The Directive includes thresholds such as:
- EUR 100 million for AIFMs managing leveraged AIFs
- EUR 500 million for AIFMs managing only unleveraged AIFs with no redemption rights for five years
Even when a lighter regime applies, obligations do not disappear. Registration requirements and reporting expectations can still apply depending on the activity and jurisdiction.
Third-party vs. in-house AIFMs
Once you determine you need an AIFM model, the next decision is usually to build or partner.
In-house AIFM models can work well for managers with scale, stable products, and mature compliance infrastructure. They require ongoing investment in governance, staffing, systems, and regulator engagement.
Third-party AIFM models can reduce time-to-market and provide an established framework for oversight. They are commonly used when cross-border distribution is a priority, or when internal teams want to stay lean while still meeting regulatory expectations.
Jurisdiction also matters. Luxembourg and Ireland are two of the most common AIFM domiciles for EU fundraising and oversight models. See AIFM Services Luxembourg for local coverage and context.
Practical takeaway for compliance and operating teams
AIFMD compliance is easier when the operating model is designed to produce evidence, not just outcomes. The AIFM framework is ultimately about accountability. It connects investment strategy to risk controls, reporting discipline, valuation governance, and service-provider oversight.
Want to pressure-test your AIFM operating model? Alter Domus can help you design oversight and reporting workflows that stand up to regulator scrutiny—without adding unnecessary complexity. Speak with our team to discuss your structure, delegation model, and AIFMD reporting needs.
Insights
Analysis
How and why LP allocation decisions are changing
Despite geopolitical headwinds and a tepid M&A market, investor allocations to private markets are still expected to grow in the long-term. Drawing on insights from across Alter Domus’ global client base, Part 1 of this analysis examines how LP allocation priorities are evolving – and what is driving that change.
Why LP allocation strategies are being re-examined
After a prolonged period of expansion, private markets are entering a more complex phase of the cycle. Higher interest rates, slower exit activity, and elevated portfolio concentration have increased pressure on liquidity- and pacing models, prompting LPs to reassess not only how much capital they allocate to private markets, but how that capital is deployed. This reassessment reflects a deeper shift than cyclical volatility alone: LPs are placing greater emphasis on portfolio construction, risk alignment, and operational transparency as private markets become a permanent and materially larger component of institutional portfolios.
The evolution of private markets allocations
The private markets industry has evolved from a niche asset class into a core pillar of institutional investor portfolios.
Private markets assets under management (AUM)have increased almost 20-fold since the turn of the century, reaching around $22 trillion, according to McKinsey − underscoring the institutionalization of private markets, now viewed less as an opportunistic play and more as a core engine of portfolio resilience. Analysis from Aviva shows that average global private markets allocations now sit at 11.5%, with some investors targeting private markets exposure as high as 20% and 30%.
Alternative assets now sit firmly in the mainstream. While the industry maintains an upward trajectory – with a Nuveen investor survey finding that two-thirds of investors plan to increase private asset allocations during the next five years − this growth phase is no longer defined by capital inflows alone, but by the sophistication with which LPs are deploying that capital.
The rising interest rate cycle, a slowdown in exits and an allocation bottleneck have led LPs to reappraise their private markets allocation strategies. Overall allocations trends remain positive, but AUM growth is moderating as LPs take stock following the post-pandemic boom.
One of the key trends emerging from this LP reappraisal is a return to the mid-market, as investors recognize the mid-market’s track record of generating alpha and delivering exits and distributions across market cycles.
Allocation strategies are entering a new era
While overall private markets allocations still have room to grow, the composition of those allocations is changing.
LPs are more demanding, sophisticated, and selective, seeking portfolios that align with specific operational, risk, and geographic requirements. The drivers of LP allocation strategies today are markedly different from a decade ago. Today’s LPs are not merely reallocating capital ─they are redefining the purpose and design of their private markets exposure.
At Alter Domus we have observed five key trends that are driving the reconfiguration of investor allocation strategy:
Asset diversification
Growth in private markets AUM has been underpinned by the rise of additional private markets strategies – including private credit, infrastructure, and secondaries ─alongside the foundational buyout and venture capital asset classes.
Private credit, private infrastructure, and secondaries provide investors with more ways to tailor portfolios and pursue targeted risk-adjusted returns. An Aviva investor survey found that diversification was a top driver for allocating to private markets ─reflecting a broader desire to smooth volatility and generate durable income streams as market cycles lengthen.
Recent fundraising data reflects this appetite. While figures from PEI show private equity fundraising fell by 17% percent year-on-year in H1 2025, infrastructure fundraising more than doubled, according to Infrastructure Investor, and private debt reached $146.9 billion in H1 2025, surpassing H1 totals for 2023 and 2024, according to Private Debt Investor. Data also show that while average infrastructure and private debt allocations are increasing, LPs are reducing private equity allocations.
These shifts suggest a subtle recalibration−away from growth-heavy strategies toward income-oriented, yield – stabilizing assets. In effect, LPs are seeking multidimensional diversification: across assets, geographies, and liquidity profiles.
Broadening exposure across geographies and deal tiers
In addition to diversifying by asset class, LPs are also reassessing geographic and deal size exposure, with a pivot away from portfolios heavily concentrated in particular regions or large-cap funds.
On geographic exposure, for example, some investors and dealmakers are looking to diversify portfolios outside of the US in response to domestic volatility and policy shifts. The Rede Liquidity Index, compiled by fund adviser Rede Partners shows that global investors plan to deploy less capital in North America, with Europe and Asia set to be the main beneficiaries of any recalibration of US allocations. This diversification of deal flow is blurring traditional boundaries between regional and sector mandates.
At the same time, LPs are rethinking the “big is better” mindset that has shaped fundraising trends in recent years.
In 2024, more than 20 % of total private equity fundraising by value was secured by just 10 firms, but in 2025 mid-market strategies have moved into the frame. During the last 18 months large institutional investors have signaled their intent to increase exposure to mid-market managers. The New York State Teachers’ Retirement System is considering upping its target for small and medium buyout funds from 45 % to 55 %, while the California Public Employees’ Retirement System has upped its exposure to mid-market private equity from 28 % of its budget allocation to 62 % during the last 24 months, PEI reports. Other investors, including Canadian retirement system CDPQ and asset manager Schroders Capital have also pivoted their focus more towards the mid-market.
Investors are recognizing the alpha that mid-market managers can deliver. According to a study by private markets asset manager PineBridge which compared the IRRs of mid-market and large-cap buyout funds across vintage years from 2013 to 2021, upper quartile mid-market funds outperformed large-cap upper quartile funds by 7.2 %. PineBridge also found that mid-market buyout funds show less correlation to public equities than large-cap funds and are less volatile and more resilient in periods of macroeconomic uncertainty.
The liquidity priority
Private capital is inherently illiquid, but recent conditions have heightened LP sensitivity to liquidity. The backlog of exits, rising rates, and slower distributions have made liquidity a top consideration in allocation decisions.
According to Bain & Co., buyout distributions as a share of NAV fell to a ten-year low of just 11%. McKinsey’s 2025 investor survey found that 2.5x as many LPs now rank distributions-to-paid-in-capital as their most important performance metric compared to three years ago.
The liquidity squeeze is forcing LPs to reassess pacing models and distribution expectations, a shift that will ripple through GP fundraising cycles. Liquidity, once a secondary consideration, is now a core pillar of allocation strategy.
Intensifying LP reporting demands
As private markets allocations now account for a larger chunk of investment portfolios, LPs naturally expect more detailed and granular reporting from managers.
A 2025 MSCI GP survey found that LPs are demanding stronger benchmarking, risk attribution, and reporting from GPs, while a Preqin survey showed that 73% of LPs cite inconsistent reporting as a friction point.
As LPs demand deeper transparency, data competency is becoming a decisive competitive advantage for GPs. Beyond operational excellence, data management and back-office capabilities have become key differentiators in manager selection, with LPs prioritizing those who can provide timely, accurate, and actionable insight. The ability to translate operational data into investor-ready insights now defines institutional quality.
Forensic alternatives portfolio construction
Private markets portfolio construction has evolved from an art to a science — a blend of data analytics, risk modeling, and opportunistic strategy.
LPs are adopting a systematic, multi-alternative approach to portfolio design. GIC and JPMorgan Asset Management (JPMAM), for example, have championed frameworks that balance long-term (10–15 year) commitments with more active short-term allocations across private equity, debt, infrastructure, and real assets, arguing that LPs can improve risk-adjusted returns.
LPs are no longer content with static allocation frameworks — they are adopting fluid models that dynamically adjust exposure by risk, duration, and performance correlation. The result is a more analytical, outcomes-based approach that prizes optionality as much as performance.
From growth to precision
LP strategies in private markets are becoming more sophisticated, analytical, and adaptive, and outcomes- -driven. Allocation decisions are increasingly shaped by liquidity dynamics, performance dispersion, and regulatory complexity, requiring investors to move beyond static models toward more deliberate portfolio construction frameworks.
As private markets continue to represent a larger and more permanent share of institutional portfolios, the emphasis is shifting from the volume- of capital committed to the precision with which it is deployed. LPs are prioritizing flexibility, transparency, and risk alignment — signaling a more disciplined approach to allocation that is likely to define the next phase of private markets investing.
Conclusion
Taken together, these shifts point to a more deliberate era of LP allocation. As private markets become a larger and more permanent component of institutional portfolios, allocation decisions are increasingly defined by precision, selectivity, and outcomes rather than capital deployment alone. Liquidity dynamics, performance dispersion, and operational transparency are now central to how LPs construct and evaluate private markets exposure.
In Part 2, Alter Domus will examine how GPs are responding to these evolving LP priorities and what this shift means for manager positioning, reporting, and fundraising strategy.