OAKS, PA & LONDON — A new study from SEI® (NASDAQ: SEIC) reveals the operational inefficiencies and cost burdens stemming from data replication in private market fund administration. Conducted in collaboration with Cutter Associates, the research surveyed private market asset managers across the U.S. and U.K., identifying widespread reliance on in-house replication despite its significant drawbacks.
The findings emphasize that 55% of firms duplicate their fund administrators’ work internally by maintaining an accounting book of record. This practice demands substantial resources, with 43% of non-investment staff involved in oversight or replication activities at some firms. Such operational duplication not only drives technology expenses but also delays reporting efficiencies, with nearly half of respondents citing delays of three or more days.
“Global private markets assets under management have grown nearly 20% annually since 2018,” said Phil McCabe, Head of SEI’s Investment Managers business. “As firms scale to meet demand, they often juggle multiple fund administrators because of regulatory, cross-border, or M&A complexities. Managing data replication internally drains resources, but a modern fund administrator can serve as a strategic partner, consolidating data while managing multiple asset classes and geographies.”
The Push Toward Consolidation
The industry’s reliance on multiple fund administrators remains prevalent, with 57% of firms working with several providers, sometimes upwards of seven. The inefficiencies are driving a clear preference for consolidation, with 58% of firms identifying one provider as their ideal setup and an additional 21% preferring only two.
The study highlights early signs of transformation, with 24% of firms actively reducing replication and another 55% considering it as part of their strategic plans. Nearly two-thirds (62%) of respondents noted a fund administrator’s ability to minimize replication as a key factor in their selection process.
Commenting on the research, Bryan Astheimer, Head of SEI’s Investment Managers business for EMEA, said, “The increasingly complex environment is putting pressure on firms to meet investor demand while maintaining operational efficiency and improving the bottom line. A single strategic partner that offers data quality, multi-domicile capabilities, and seamless system integrations makes a strong case for consolidating fund administrators. But firms don’t need to tackle everything overnight. A phased approach, beginning with one product launch, can mark the start of a meaningful transformation.”
Implications for Asset Managers
Replicating fund administration processes not only increases costs but also hampers transparency and data visibility, underscoring the need for streamlined systems and strategic partnerships. The emerging shift toward reduced replication and consolidated management indicates a rising focus on efficiency and adaptability in private market fund operations.
This research signals a critical pivot for private market asset managers as they seek to align operational infrastructure with the mounting complexity of global investment landscapes. The findings suggest that, with the right partner, firms can take steps to simplify operations, reduce costs, and ultimately better meet investor expectations.
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