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Myths of managing alternative investments 


Hugues Chabanis
Head of Innovation, SimCorp

We bust the three biggest myths of managing alternative investments.

Investments in alternatives are rising exponentially. It took about 40 years to reach USD 8 trillion in AUM since money started pouring in from pension funds, and yet that same growth is expected in the next five years.

There are plenty of drivers for the explosion of interest as institutional investors are turning to private assets to help diversify and return-enhance their portfolios.

Clearly, there are enormous opportunities, however, this hypergrowth also creates risks. One big challenge is the masses of unstructured data, which too many firms are still handling with brute force manual processing. Another is outdated management practices.

Unfortunately, there are myths perpetuated throughout the industry that make it even harder for asset owners to modernize and take advantage of the significant opportunities ahead. In this report, we highlight the three biggest myths and explain how you can successfully embrace alternative investing. 

  • Myth #1: “Alternative investments will always be manual. You need an army of people to manage complex documents.”
  • Myth #2: “Alternative investments are too difficult to manage. It is OK to work with exposure figures from 3 to 5 months ago and predict cash flows once a year.”
  • Myth #3: “Alternative investments… we can do it alone.”

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