December 16, 2022
Does anyone believe that the S&P is down 25% and Privates are only down 1% – no…It is not that the alternative market has less risk, it is that the risk is not understood. It’s not all that complicated (if you move away from a centralized data paradigm), it is just comfortable, which has dis-incentivized innovation.
When there is a major market event, around a currency, around interest rates, war, etc., Chief Investment Officers can run risk analytics around their public portfolios real time, the data on their alts portfolio often lags 150 days. Inveniam teamed up with valuation providers like Cushman & Wakefield, Valustrat, Deloitte, and Houlihan Lokey can drop this to under 30 days and provide click through access to source data in near real time.
We need to get auditable, traceable data, for alts and have third party marks for assets in alternative funds. Fund Administrators like Apex can deliver this right now. This transparency around pricing will become the norm, then it will become an obligation, because the technology exists to deliver it today.
If the alts world wants to grow their investments under management around UHNW, Family Offices, and individual investors they will need this form of third party marking of their assets. Technology around private market asset data will drive the growth, now that 0% money has gone away.
Data will not be the differentiator in the old sense, who has it, who doesn’t, in private markets…instead it will be who can access and use it faster. Asset owners will drive better data, around their assets because it will mean better cap rates, interest rates, and opportunities for capital. In this new world, who can use the data, best, fastest, ingest it, understand it, trade on it…
The data on alts is speeding up.