Optimising credit operations through technology

Featuring Tom McHugh, CEO and Co-Founder, FINBOURNE Technology; Bill McMahon, Senior Partner, Private Markets Advisory, Alpha Alternatives; and Gary Dmitriev, Founder, CrestPoint Strategic Advisors. Hosted by Markets Media.

The technology landscape for managing credit operations is highly fragmented. As firms increasingly blend public and private credit assets within the same portfolios, the need for a unified data strategy has never been more urgent. In this Markets Media webinar, three industry practitioners discuss how asset managers can streamline credit operations, automate deal workflows, and meet the rising data demands of sophisticated limited partners.

The case for a unified public and private credit platform

The credit market has traditionally been horizontally segmented, but a verticalization trend is now underway. Asset classes that were historically public are seeing similar structures supported by private capital. This convergence is forcing a rethink of how firms manage their technology stack.
Vendors have historically built solutions focused on a single workflow or a specific problem. As public and private markets consolidate, that approach is no longer sufficient. Firms need a platform that can run all operations from the same place, doing more with less — a recurring theme across the industry for the past decade.
A single golden source of data is critical to supporting this shift. Whether it is market data on the public side, or manually analysed issuer financials on the private side, having one place for regulatory reporting is no longer optional, it is a competitive necessity.

Keeping pace with deal flow through automation and AI

With an increased flow of private capital, asset managers are participating in a more diverse set of underwritings than ever before. Keeping pace with that volume requires automation at every stage of the deal lifecycle.
Large language models are already helping firms automate the initial drafting of prospectuses, summarise committee meetings and conduct market comparisons. As the number of data points to be collected increases and the similarity between deals decreases, automation becomes the only viable path to managing deal flow at scale.

As the number of data points to be collected goes up, and the similarity between them becomes lower, the more firms need to automate and have likeness so managers can look at disparate deals in a relatively uniform way.

Tom McHugh, CEO, FINBOURNE Technology

Despite early concerns around AI, the consensus among practitioners is that it will become as indispensable as Excel or Bloomberg terminals. Every platform in the industry will need to integrate LLMs in some form to help drive returns.

Meeting the rising data demands of sophisticated LPs

Over the past decade, limited partners have become significantly more sophisticated in how they evaluate and monitor their private markets allocations. They are no longer satisfied with quarterly PDF statements. They want granular, timely data — delivered in formats they can ingest directly into their own systems for analysis.

LPs have really come up to speed on the nuanced differentiations around how these assets behave and how risk is measured. They are looking to compare and contrast asset managers and the credit quality of assets that they are sourcing, as well as their performance.

Bill McMahon, Senior Partner, Alpha Alternatives

LP expectations now extend to returns per unit of risk, FX and interest rate impacts, Sharpe ratios, and peer comparisons across private assets. Many are also insourcing their own portfolio management, internalising trading and co-investing directly — raising the bar for the transparency and quality of data asset managers must provide.
Without a comprehensive data strategy, meeting these expectations will become increasingly difficult as LP sophistication continues to accelerate.

Service providers as a data bottleneck

Fund administrators, custodians, trustees and outsourced loan servicers play a critical role in the credit operations ecosystem, but their current technical infrastructure often acts as a bottleneck rather than an enabler.
Most administrators can onboard and operate in a process-driven way, but they lack the flexibility to respond quickly when managers need things to change. Most currently lack the capability to provide live visibility on their activities.

In a perfect world, there is a co-sourced model where service providers are an extension of the team. They perform all the investment accounting and fund accounting, but asset management firms have real-time insights into that activity.

Bill McMahon, Senior Partner, Alpha Alternatives

The closer the asset management relationship can be brought to the fund administrator relationship through shared data standards, real-time connectivity and clearly articulated technology requirements, the more organisations will be able to scale and drive profitability.
When selecting service providers, asset managers should lay out their data and technology requirements upfront. Providers will need to evolve to meet these expectations or risk losing mandates to those who can.

To learn more about how FINBOURNE supports unified public and private credit operations, visit our private credit page or contact our team.