It didn’t make headlines, but the news is a major development in the alternatives sector nonetheless. A large majority (83 percent) of limited partners (LPs) have either recently upgraded, or are planning to upgrade, their back office monitoring technology, according to a recent Coller Capital survey of LPs.
That type of stark departure from the status quo warrants some explanation.
For different reasons, LPs have been slower than GPs to embrace new technology. Public pensions are hesitant to spend tax payer dollars on new systems while smaller investors such as family offices and endowments tend to have less room in the budget for tech upgrades, even if it means savings in the long-run. As capital providers, LPs are also under less pressure than GPs to reap efficiency gains and savings from new technology in order to remain competitive.
So what’s changed? Three key trends explain the situation: