In today’s volatile and fast-evolving market environment, institutional investors are managing a complicated array of public and private assets across their portfolios, each with varying levels of risk assessment needs. Yet operating models and systems, which have mostly developed over the years in silos based on asset class or a single business function, make it difficult to attain a unified view of risks and returns. As portfolios have increased in complexity, the need for improved analytics and better data to optimise asset allocations has grown. 

In fact, in a recent Northern Trust global asset owner peer study of 180 senior leaders, 52% of respondents said they are looking for improved investment analytics and 36% are looking for more real-time data in order to better manage their portfolios. 

To remain viable and seize opportunities, institutional investors need to graduate from a siloed model to a holistic, total portfolio view that provides comprehensive insight into performance, risk, exposure and liquidity over the entire portfolio. This view is crucial to enable active, real-time management and to make timely, data-informed decisions that align with the investor’s strategic and tactical asset allocations, particularly in light of the shift towards factor-based investing and risk budgeting. 

The challenge of obtaining a total portfolio view

Global exposure to alternatives continues to grow, with 86% of respondents to the Northern Trust study investing in private markets. Asset owners face mounting pressure to bring clarity to increasingly complex portfolios. This is compounded by dynamic market conditions, such as interest rate changes and geopolitical instability, as well as evolving regulations. 

With nearly all of the study respondents reporting they have exposure to private markets, a forward-thinking approach to portfolio optimisation and data-driven solutions is crucial. Yet most asset owners have invested in technology infrastructure primarily supporting liquid assets with a separate solution for non-liquid assets, making it difficult to consolidate and analyse data across both public and private assets.

Asset owners seek greater insight and control

As expectations rise, asset owners are looking for innovative investment analytics, greater transparency and data integration with investment advisors and data vendors, even for illiquid holdings. Data accuracy, consistency, and timeliness have also become top priorities as asset owners strive for a more holistic, real-time view of the total portfolio. A third of global asset owners cite ensuring they have timely, accurate, and appropriate data to support agile decision-making as a top challenge—alongside the ability to optimise asset allocation strategies.

Meeting these demands requires analytics tools that are not only sophisticated enough to handle the complexities of private markets but also scalable. Increasingly, asset owners are turning to providers that can support this level of interoperability as they look for solutions in combination with services that enable side-by-side viewing and analysis of public and private assets.

A unified approach

As data becomes a strategic asset in its own right, a total portfolio view empowers asset owners to harness it more effectively across the entire investment lifecycle. From more efficient and effective investment decisions to more consistent performance monitoring and proactive risk management, a total portfolio approach offers a comprehensive framework for navigating today’s complex market environment. A single provider that can support both the technology and middle office services needed to achieve this view adds even greater value - reducing operational complexity, improving data consistency, and strengthening governance across the portfolio. This unified approach is key to building a resilient, data-driven investment strategy.

Encouragingly, institutions remain highly receptive to new technology and innovation, with nearly 80% of respondents citing increased technology adoption as a way to make their operations more efficient and nearly 60% looking to increase automation, enabling more modern, data-driven and unified investment data frameworks.

Positioned for the future

The shift towards a unified, total portfolio view represents a transformative step for institutional investors. Embracing innovative technology and analytics is not just about staying competitive but about fundamentally enhancing the investment process. By integrating data across all asset classes, from liquid to illiquid, and leveraging advanced tools for real-time insight, asset owners can achieve a more agile, responsive, and informed investment strategy. This holistic approach not only addresses the complexities of modern portfolios but also aligns with the growing demands for transparency, regulatory compliance, and risk management. As the investment landscape continues to evolve, those who adopt a comprehensive, data-driven approach will be best positioned to navigate the challenges and seize the opportunities of tomorrow’s markets.