68% of investors say a single view of their public and private portfolios is crucial – Aladdin

Private markets are occupying larger and larger slices of institutional investors’ portfolios, but lack the same structure and accessibility that govern public markets. Investors across the spectrum want better access, transparency, and liquidity in their private portfolios, according to a new paper, The Way Forward 2025, by Aladdin, BlackRock’s investment management technology platform.

Global alternatives assets under management (AUM) is forecast to exceed $30tn by 2030, according to Preqin’s Future of Alternatives 2029 report. This is almost double the $17.1tn in alternatives AUM as of September 2024, which itself is more than triple the $5.1tn in December 2014, according to Preqin data (Preqin is also owned by BlackRock).

‘The distinction between public and private assets is blurring – a dynamic that’s driving the need for a common language across portfolios, teams, and counterparties,’ Sudhir Nair, Senior Managing Director and Global Head of Aladdin, said in the paper.

The firm’s ‘to-do list’ encompasses four key themes: digital disruption; private markets codification; the universal expansion of data; and the democratization of investing. ‘From data standardization, to expanded access, to emerging tech (including AI) – these themes will continue to define the next phase of the ecosystem at large,’ said Nair.

Central to Aladdin’s aims is creating whole portfolio solutions for investors that provide a holistic view of public and private investments, as well as the analytics that let them navigate regional and regulatory requirements. More than two-thirds (68%) of investors surveyed believe that having a single view across public and private holdings is crucial to managing investments.

‘As private markets expand and continue to evolve, it’s critical for institutions to manage data in a way that links public and private investments seamlessly,’ Laura Kayrouz, Senior Partner & Global Co-Head of Investments at Alpha AWM, a unit of financial services consultancy Alpha FMC, said in the report. ‘A comprehensive understanding of these diverse assets across the total portfolio is essential to unlock the most strategic opportunities and mitigate risks effectively.’

Aladdin said that the industry will need to work toward creating a common language and standard set of practices that can be adopted by the whole ecosystem, with ‘digitization and standardization going hand-in-hand, providing another layer of structure, and moving away from paper-driven, manual processes to drive greater efficiencies.’

Data is growing more important for users across the spectrum, including for research and operational use cases, micro-innovation for individuals, emerging investment markets, and new business growth.

‘Enterprise infrastructure must be designed to support the convergence of public and private markets and the growing data needs of institutional and wealth management clients – including using AI to fill gaps in data, automate routine tasks, and provide predictive analytics,’ Nidhi Chappell, Vice President & General Manager of Azure AI Infrastructure at Microsoft, said in the paper.

The impact of generative AI (GenAI) will be transformational over the longer term. Aladdin said the value of AI ‘lies beyond the hype of drastic technological change. Today, the value is really in an organization’s ability to harness GenAI as a tool for true, pragmatic business transformation.’

Professional investors are now looking to use GenAI to condense workflows and reduce friction. A majority of investors (69%) believe that GenAI will create efficiencies that lead to more value-add investment management activities. AI agents will become the building blocks that enable customization, drive value, synthesize data, and streamline processes.

In the report, Jonathan Regenstein, AI Industry Principal, Financial Services at cloud-based data storage company Snowflake, said: ‘In financial services, we are seeing a shift in focus from technical success with AI to commercial, operational, and strategic success. This goes beyond using LLMs and lands in the realm of the ROI behind AI-driven business applications.’

_{The opinions and facts included within the above do not constitute investment advice. Professional advice should be sought before making any investment or other decisions. Preqin providing the information in this content accepts no liability for any decisions taken in relation to the above.}