Fintech Insights

Three Elements of Data Governance Alternative Asset Managers Need to Master

October 31, 2017

Data governance isn’t typically thought of as the coolest discipline within the alternative asset industry. That’s OK – the data doesn’t mind. But maybe data is cooler – or at least an area worth some new approaches – than you think. After all,we’ve foundthat data is a key factor to growth readiness in the industry, and what’s cooler than growth?

If alternatives COOs are gunning for growth, data governance must be at the top of the revamp list. Data improvements can save fund managers time and money and empower growth.

A solid data governance culture provides managers with the agility needed to expand into adjacent markets or new asset classes. At the same time, regulators and investors are taking a hard look at how funds are managing their entire businesses, putting even more pressure on managers to improve their operational infrastructure.

What elements do you need in your growth-ready data governance strategy? Here are the three interrelated elements to incorporate: 

  1. Data Creation

    This is where you are generating the data that ultimately gets turned into things such as positions, valuations and tax lots. In the data creation part of your strategy, you will want to ensure you have technology in place to generate data across the entire life cycle of your fund across multiple asset classes – in as few places as possible. If you’re thinking about structuring data, this is when to do it. Without straightening out this step, creating actionable insights (part of the next element) becomes more challenging. And that could mean putting your business at risk when it comes to various regulatory guidelines.  

  2. Data Management

    The data management part of your strategy is where you validate your data, and where data can begin supporting the business. You may, for example, require technology that can track the progress of each fund on a daily or intra-day basis, and alert you to where your team should focus their attention in the valuation cycle. Workflows, automation and advanced analytics are critical factors to getting this step right to best support fund decision-making as well as investor and regulatory reporting needs.

  3. Data Dissemination

    This is where you secure, standardize and enable the sharing of data. Here’s where your investor portal would come into play, where intuitive, dynamic data visualization is key and a secure, efficient approach to reporting, complete with templates, is critical. In this part of your data governance strategy, you’ll need technology to empower secure, scalable and flexible reporting so your data is provided in the right way to the right parties in the right formats.

Now, the key to these three items is that they must be interwoven to be most effective. You need a balance across all three elements, so be careful not to neglect any one area as you’re enhancing another.

Emphasizing a culture where data flows across teams and departments, where data is central to each area of the business, is another facet of taking a growth-ready approach to data governance. The stronger your data strategy, and the technology that serves as its foundation, the better you will be positioned for future success.

If you want to hit your growth targets, empower your firm to see a data framework as a form of fuel to get there.