SS&C Unveils Insights from Inaugural Emerging Managers Survey, Revealing Shifting Investment Priorities for 2024

Rhea-AI Summary

LPs plan to increase allocation to private debt and equity, while emerging managers focus on technology.

Positive

• LPs are planning to increase their allocation to private debt and private equity over the next 12 months. Emerging managers are investing in technology to achieve efficiency and reduce manual work. Sixty percent of GPs are considering using artificial intelligence to drive efficiency gains.

Negative

• Due diligence constraints and compliance concerns are cited as significant obstacles for LPs. Emerging managers highlight time and resource constraints, with nearly 70% saying their operational infrastructure would benefit from an upgrade.

LPs look to boost allocations in private debt and equity while emerging managers embrace technology

WINDSOR, Conn., Oct. 24, 2023 /PRNewswire/ -- SS&C Technologies Holdings, Inc. (Nasdaq: SSNC) today revealed insights from its first annual Emerging Managers report. Produced in association with Private Equity Wire, the survey* of 143 market participants found LPs are planning to increase their allocation to private debt and private equity over the next 12 months. Emerging managers, faced with fundraising challenges, are focusing on enhancing their operational technology to meet LPs' transparency and reporting demands.

"Despite a persistently difficult environment for fundraising, more than two-thirds of GPs and LPs we surveyed are invested with emerging managers and continue to see opportunities in the segment," said Bhagesh Malde, Head of SS&C GlobeOp. "To enhance their visibility, emerging managers are turning to technology, leveraging artificial intelligence to automate tasks and alleviate operational burdens within their teams."

The most important factors influencing LP allocation to emerging managers include team expertise, transparency/reporting quality, and alignment with LP philosophy. At the same time, due diligence constraints and compliance concerns are cited as significant obstacles. Other key findings include:

• LPs seeking higher alpha (88%) and unique investment strategies (70%) from their investments with emerging managers, with 65% favoring private market strategies.
• More than half of emerging managers surveyed highlight time and resource constraints, with nearly 70% saying their operational infrastructure would benefit from an upgrade.
• Emerging managers are investing in technology to achieve efficiency and reduce manual work (69%), while a third (27%) see technology as a way to achieve cost savings.
• Sixty percent of GPs are considering using artificial intelligence to drive efficiency gains. About 20% of the managers surveyed are already piloting AI in their tech stack.

Click here to read the full report.

Learn more about SS&C's solution for emerging managers here.

*Responses were collected from 80 LPs and 63 GPs in July/August 2023.

About SS&C Technologies

SS&C is a global provider of services and software for the financial services and healthcare industries. Founded in 1986, SS&C is headquartered in Windsor, Connecticut, and has offices around the world. Some 20,000 financial services and healthcare organizations, from the world's largest companies to small and mid-market firms, rely on SS&C for expertise, scale and technology.

Additional information about SS&C (Nasdaq: SSNC) is available at www.ssctech.com.

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SOURCE SS&C

FAQ

What are LPs planning to do with their allocation?

LPs are planning to increase their allocation to private debt and private equity over the next 12 months.

What are emerging managers doing to enhance their operations?

Emerging managers are investing in technology to achieve efficiency and reduce manual work.

What percentage of GPs are considering using artificial intelligence?

Sixty percent of GPs are considering using artificial intelligence to drive efficiency gains.

What are the obstacles for LPs in allocating to emerging managers?

Due diligence constraints and compliance concerns are cited as significant obstacles for LPs.

What are the challenges faced by emerging managers?

Emerging managers highlight time and resource constraints, with nearly 70% saying their operational infrastructure would benefit from an upgrade.