Operations move centre stage
Operational infrastructure has always taken a back seat behind the investment story in private markets. Managers compete on track record, access to deals, and investment judgement. Ocorian’s survey¹⁷ suggests that hierarchy is changing.
Asked to pinpoint the most important source of competitive advantage by 2028, 59% chose operational excellence. Just 12% chose investment performance, with distribution reach at 19% and product innovation at 9%. What’s more 38% think the market is underestimating the operational strain of running larger, more complex alternative-asset businesses.
That does not mean returns matter less. It might reflect confidence that returns are already a given. But however you look at it, the machinery around producing and reporting those returns has become much more complicated.
Regulation becomes an operating issue
Regulation is a large part of this complexity. 44% of respondents believe regulatory fragmentation is the issue the market is most underestimating.
Its effects reach well beyond compliance. 84% say regulation is either a significant factor or a primary constraint when determining fund structure. More strikingly, 91% say they encounter at least occasional rework when tax planning, operational execution and compliance requirements are not properly lined up. Among firms experiencing that problem, 80% say it arises during fundraising.
Regulatory complexity means that fund structure, domicile, investor access, tax and reporting can no longer be considered in isolation. A decision in one area increasingly has consequences for all the others.
Technology helps, but creates its own problems
AI is already embedded in the operating model. 69% are using it for compliance and regulatory reporting, 57% for portfolio monitoring, 44% for due diligence and data analysis and 41% for communications and reporting. Only 1% say they are not currently using AI in investment processes.
But it is not a panacea. 70% say integrating new technology with legacy systems is a major compliance challenge. AI governance worries 57%, cybersecurity and data protection 56%, and keeping pace with regulation around digital infrastructure 50%.
The technology is moving quickly; the systems, governance and regulation surrounding it have to catch up.
Outsourcing becomes part of the operating model
Managers are already relying heavily on external providers. Over the past two years, 85% of respondents have increased their use for investor onboarding and ongoing investor services, 83% for fund accounting and financial reporting, 78% for ESG data and disclosure support and 72% for fund administration. Even in regulatory reporting and compliance, 55% have increased their use of external support.
There is little sign of that reversing. 80% expect their use of third-party providers to increase further over the next two years.
As operations become more specialised, there is less reason to assume everything needs to be done in-house. The question is increasingly where internal capability really adds value and where a specialist provider can do the job better.
¹⁷ Ocorian’s 2026 asset manager survey of 300 senior executives at private equity fund managers
Contact us
