By Hugh Stacey, Executive Director, Asset Owner Solutions
The asset management industry is undergoing a significant wave of consolidation, driven by the pursuit of greater economies of scale and broader business scope. A recent BCG report shows that, in a study of 270 asset managers, the average firm doubled its assets under management (AUM) between 2013 and 2023. These managers now oversee increasingly complex portfolios that span multiple jurisdictions, asset classes and regulatory environments.
As consolidation accelerates, post-merger integration (PMI) becomes the critical phase where the true value of a merger or acquisition is either realised or lost. Despite the strategic intent behind most M&A deals, over 60% fail to deliver expected returns, often due to poor integration planning and execution.
This is exacerbated by the fact that, in private markets, data often resides in disconnected systems – from accounting platforms and valuation tools to investor portals and property management systems. This fragmentation creates barriers to consistent reporting, investor transparency and scalable growth.
At the heart of successful PMI, therefore, lies a robust data strategy that enables seamless integration of systems, people and processes.
Why data matters in PMI
PMI is not just about combining two asset managers; it’s about creating a unified, high-performing entity. This requires early planning, stakeholder alignment and a clear roadmap. However, none of these elements can be effectively executed without a strong foundation of data.
Data integration is one of the most complex and essential aspects of PMI. Asset managers often face challenges such as:
- Fragmented data across asset classes and jurisdictions
- Inconsistent valuation methodologies
- Limited transparency in investor reporting
- Siloed systems used by fund administrators, property managers and portfolio companies
- These issues can derail integration timelines, inflate costs and erode investor confidence – unless addressed through a unified data strategy.
Data as a driver of performance
In the context of PMI, data is more than just an operational asset; it becomes management information (MI) that drives performance. Well-integrated data architecture allows leadership to monitor the combined entity’s progress against strategic goals, identify synergies and make informed decisions in real time.
A robust data strategy enables:
- Real-time performance monitoring across illiquid assets
- Standardised investor reporting across legacy systems
- Identification of synergies in asset management and operations
- Retention of key talent and alignment of organisational culture
On the last point, unified HR data supports talent retention and cultural alignment – two critical factors in successful integration. According to a report by Mercer, approximately 40% of critical talent is lost within 18-24 months following an M&A transaction. This highlights the importance of using data to build a harmonised HR integration system that can proactively identify key talent, track engagement and support retention strategies.
The role of scalable, AI-enabled data platforms
Scalable, AI-enabled data platforms are essential in private market PMI. These platforms support:
- Automated data ingestion from multiple sources
- Robotic standardisation and validation for financial reporting
- Governance frameworks to ensure compliance across jurisdiction.
This architecture transforms PMI from a cost centre into a value creation engine, enabling firms to consolidate operations, unlock hidden insights and scale efficiently.
A value creation lever in action
Consider a scenario where a private equity manager acquires a real estate fund. The integration process presents immediate challenges: critical data (such as rent rolls, occupancy rates, footfall, lease expiries, and budget vs actuals) is dispersed across multiple systems, plus another system will be used for accounting and investor reporting. These systems often operate on entirely different architectures, making data consolidation complex and time-consuming.
Without a unified data strategy, integrating asset performance, investor records and compliance workflows could take months. The lack of standardisation and automation slows down reporting, hinders transparency and delays strategic decision-making.
However, with a robust data strategy and the right technology in place, these disparate systems can be ingested into a centralised platform. Once collected, the data is reviewed using robotic automation, standardised for consistency, and validated for financial reporting. It is then stored in a central repository and visualised through a portfolio monitoring platform, enabling stakeholders to access real-time insights and make informed decisions.
How we can support
This is precisely the kind of transformation that IQ-EQ enables – we partner with investment managers to turn integration into a strategic growth lever.
1. Tried and tested approach to data migration
We understand that after an acquisition, a manager may decide to consolidate fund administrator relationships. Switching fund administrator can seem like a daunting task, and our job is to take a pragmatic, partnership approach to ensure a smooth transition. Our team of data migration experts are proficient in accounting principles and data mapping, which gives our clients confidence that their data will be captured correctly and consistently.
2. Asset-specific software supporting manager’s multi-asset strategy
As asset managers increasingly look to add on asset-specific expertise via acquisition, we understand that supporting our clients across their multi-asset-class portfolio is crucial. We utilise asset-specific systems to support our clients across verticals: FIS Private Capital Suite (formerly known as Investran) for closed-ended funds, Allvue for loan administration, Yardi for real assets, and Paxus for open-ended funds. By working with specialised software and vendors, we capture each asset class’s specific attributes and KPIs, enabling transparent reporting.
3. Source-agnostic database supporting further integration
Acknowledging that there’ll always be data not natively compatible with above asset-specific software, rather than bending those systems with heavy customisation, we’ve adopted a data platform approach that allows us to work with client data in our data warehouse. Data that isn’t readily compatible with asset-specific software can be processed and stored in the data warehouse, so that downstream integration with IQ-EQ and client systems can be supported.
4. Visualisation across the portfolio with right organisational permissions
Client data ultimately converges in our Data Platform, enabling reporting via IQ-EQ Cosmos, our portfolio monitoring and analytics platform, or direct integration with client systems. Through IQ-EQ Cosmos, the acquirer / parent company can view top-level investment data including their own and that of the acquired company. Role-based access can also be enabled so that the acquired company can view investment data specific just to them.
Want to learn more and discover how IQ-EQ could support your firm’s PMI? Get in touch with our expert team today.
