Wealth managers confident in public/private asset convergence but lack data connectivity

Wealth managers feel they are well equipped to manage the convergence of public and private market assets, but many lack confidence in their private markets data infrastructure, according to FE Fundinfo.

Its study found that while 90 per cent of wealth managers were confident in managing the convergence of public and private assets, just 20 per cent rated their private markets data connectivity as well connected or better.

Just 6 per cent of responding wealth managers said their private markets data connectivity was fully integrated, while 46 per cent still relied on frequent manual data reconciliation.

FE Fundinfo said the report highlighted a gap between wealth managers’ confidence in their readiness and the operational infrastructure currently available to support private markets growth.

Private markets were found to be moving up the strategic and distribution agendas of wealth managers, with 67 per cent ranking them as a high priority over the next three years.

More than a quarter (28 per cent) were already targeting retail clients for private markets access, while 51 per cent viewed model portfolio providers as a key distribution channel.

FE Fundinfo argued that delivering on this demand would depend on improvements to data infrastructure and platform capabilities.

Data remained a key barrier to scaling private markets, with operational complexity and data quality ranking as the top two barriers to scaling retail and high net worth access, followed by limited liquidity options.

More than half (57 per cent) of wealth managers were prioritising workflow automation, while 49 per cent expected specialist vendors to be the primary route to improving their private markets capabilities, with just 14 per cent planning to build solutions mostly in-house.

“If private markets are going to sit alongside public assets in more investors’ portfolios, the infrastructure needs to allow the two to work together,” said FE Fundinfo head of private markets, Maryam Longrus.

“Making private markets data more consistent and easier to use alongside public market data is fundamental to that.

“Our research shows that wealth managers already see model portfolio providers as a key distribution channel for private markets, but unlocking greater adoption depends on having the infrastructure to incorporate private assets effectively alongside public investments.

“The focus now needs to be on closing those infrastructure gaps so that growing demand can translate into broader adoption.”

---