Industry Insights: Private Markets Need Better Plumbing

In this article, Fund Recs examines the rise of private assets from an operational perspective, highlighting the challenges and opportunities for service providers, and exploring how automated reconciliation and oversight technology is increasingly required to deliver scalability and regulatory comfort.

Private assets explained

Private asset strategies typically involve illiquid instruments, bespoke loan agreements, multiple custody locations and a high degree of data variability. These features create operational friction. Investor capital calls and distributions must be tracked accurately, loan-level cashflows must be monitored, fee waterfalls must be evidenced and downstream banking activity must be reconciled across multiple sources. In many firms, these activities are still performed manually across spreadsheets, email chains and disconnected systems, creating operational risk at scale.

When private assets began to grow a decade ago, the assumption was that legacy operating models would adapt accordingly. In reality, most middle and back office workflows have not kept pace with the data demands, resulting in bottlenecks at period end, prolonged reconciliation cycles and increasing audit pressure.

Why operational tooling matters

As managers deploy more private capital, they are discovering that the bottleneck is not investment capability but operational throughput. Data formats from agent banks and loan platforms are inconsistent, waterfalls are often modelled in Excel, and exception evidence is not centralised. The result is a heavier workload, slower reporting cycles and greater regulatory scrutiny.

Industrialising these workflows is now strategic. Automated reconciliation, exception management and oversight tools allow teams to surface anomalies quickly, reduce manual rekeying and produce audit-ready evidence. This ultimately lowers operational risk while improving turnaround times.

The benefits of an automated oversight layer

An automated oversight layer is particularly important for depositaries and management companies who must demonstrate independence from the administrator. Day on day NAV movement reviews, fee recalculations, journal entry analysis and share class impact assessments can be executed consistently across funds, with dashboards that surface exceptions clearly for review. In a regulatory environment where evidence is everything, spreadsheets no longer provide the level of control expected.

Implications for administrators and depositaries

For fund administrators, the rise of private assets presents both opportunity and challenge. Those able to standardise bank data ingestion, automate cash and position reconciliations and present transparent exception evidence will scale efficiently without expanding headcount. Depositaries, meanwhile, can leverage automation to demonstrate oversight of administrator outputs, manage capital activity risk, and satisfy regulator expectations around independence and repeatability.

Ireland’s operational advantage Ireland’s growth as a domicile for private asset structures is accelerating. Local administrators are investing in technology to support loan-level reconciliations, bank data ingestion and automated oversight tooling. The regulatory environment is supportive, talent in private markets is expanding and service providers are increasingly building infrastructure to support private credit and infrastructure strategies. This positions Ireland competitively for managers seeking an operationally mature jurisdiction.

Where technology fits in

As the private markets ecosystem becomes more data-heavy, firms are looking for tools that reduce manual friction, create transparency and support consistent oversight across asset classes. Solutions now exist that can ingest disparate data sources, normalise them, apply reconciliation or review logic and surface exceptions through structured workflows.

For readers who wish to explore how technology is being applied across reconciliation, oversight and evidence-management processes, further information is available on the Fund Recs website.

A call to action for private asset operators

As private asset strategies scale, operational complexity arrives before operations are ready. The firms who succeed will industrialise their middle office workflows early, treating automation as core infrastructure rather than a discretionary add-on. Those who delay may find themselves constrained by manual processes, operational risk issues and regulatory pressure.