As the secondary market evolves, new entrants recognize the value of data in driving investment success. These firms prioritize data strategies from the outset, leveraging insights to analyze potential investments and monitor underlying assets with precision. This forward-thinking approach positions those firms for sustainable growth, particularly in an environment where operational complexity continues to rise. While recruitment historically bridged gaps in operational intensity, the focus is now shifting toward robust data infrastructures to keep pace with market demands.
Scaling a secondary strategy requires addressing operational inefficiencies. We recently surveyed 150+ private markets fund managers to explore operational trends and attitudes. Our survey shows that firms rank the areas of portfolio management (18%), process efficiency (17%) and data ingestion and aggregation (17%) as the biggest opportunities for improvement. LP-led deals often involve multi-layered ownership structures and diverse regional considerations, necessitating seamless data integration to provide a clear view of holdings, performance, and risk. Without advanced systems and predictive models, the sheer volume of data in secondary transactions can overwhelm even experienced teams, impacting decision-making and resource allocation.
Artificial intelligence and machine learning tools are emerging as indispensable in this landscape. Predictive models, backed by decades of proprietary data, enable firms to forecast cash flows, evaluate fund performance and identify undervalued opportunities. These technologies not only enhance underwriting but also facilitate better performance tracking across complex portfolios. As these tools continue to evolve, firms integrating AI into their operations will achieve a competitive advantage in efficiency and scalability, while those relying solely on manual processes may struggle to keep up.
Regional variations add another layer of complexity to scaling operations. For example, North American firms often focus on process efficiency, while European and MENA counterparts prioritize portfolio management, and APAC firms emphasize transparency and compliance. Differences in due diligence standards, tax structures and third-party interactions further complicate cross-border transactions. Addressing these challenges requires a globally integrated operational framework to align regional nuances with overarching business goals.
Ultimately, firms that proactively develop comprehensive data strategies and integrate scalable technologies will be better equipped to thrive in the expanding secondary market. Whether through AI, predictive analytics or advanced management systems, the ability to streamline processes and adapt to regional demands will define future success. By building infrastructure that not only supports current operations but also anticipates future complexities, firms can position themselves as leaders in this competitive and data-driven market.
To learn more about the roles of data and technology in the secondary market, read our full "The Secondary Market" report.
