Drowning in data: the complexity trap and the cost of standing still

In this keynote article for The Drawdown, Claudia Bertolino, Head of Private Markets at Citco Fund Services, explores how secondary vehicles, continuation structures and hybrid funds are fundamentally redrawing the boundaries of operational excellence in private markets.

Investor demand for greater flexibility, new liquidity solutions and broader access to private markets is driving a decisive shift away from traditional, siloed fund structures toward hybrid, evergreen and more dynamic models. The pace of that shift is accelerating – and it is redefining what operational excellence looks like.

This is not an incremental change. It reflects a fundamental redefinition of how capital is deployed, managed and recycled across the investment lifecycle. Structures are becoming more adaptive, with managers expected to respond to changing market conditions, evolving investor expectations and complex liquidity needs in near real time.

The secondaries market is perhaps the clearest reflection of that evolution. Over the past decade, it has moved from a niche liquidity mechanism into a core component of the private markets ecosystem. According to Blackstone, global secondaries transaction volumes reached approximately $226bn in 2025, significantly above the prior record of $160bn in 2024, with expectations that annual volumes could exceed $400bn by 2030.

As continuation vehicles, GP-led transactions and broader market participation become more prevalent, operating models are being tested in ways they were never designed for. Much of today’s infrastructure was built around linear, predictable workflows, infrequent reporting cycles and long-term capital deployment. The current environment demands far greater flexibility.

When liquid meets illiquid

Private markets liquidity has faced significant headwinds in recent years – a product of both macroeconomic conditions and structural pressures unique to the asset class. Indeed, the rise in interest rates weighed on valuations and slowed traditional exit routes, with IPOs and M&A activity falling well short of prior cycle highs. 

At the same time, private market valuations adjusted more gradually than their public counterparts, creating a persistent gap between reported NAVs and transaction pricing. Many managers responded by deferring exits, which slowed distributions and intensified demand for alternative liquidity solutions. 

The result has been the proliferation of structures designed to provide that flexibility. These are not simply more vehicles – they are structurally different ones, requiring operating processes and data capabilities that were not envisaged when much of today’s infrastructure was established.

Blurred boundaries

This shift is most visible where liquid and illiquid characteristics begin to converge. More frequent valuation cycles and continuous capital movement are replacing traditional deployment timelines, requiring accounting, reporting and servicing functions to operate at a very different cadence – one many platforms were not built to sustain GP-led transactions, particularly continuation vehicles, illustrate this change. While they enable managers to retain high-conviction assets and offer liquidity to existing investors, they also introduce structural complexity. Multiple investor cohorts may hold exposure to the same underlying asset under different terms, compounding the administrative and operational burden.

At the same time, secondary activity is expanding beyond private equity into private credit, infrastructure and real assets, each bringing distinct valuation approaches, cash flow profiles and reporting requirements.

The ongoing shift toward retailisation further amplifies these pressures. Structures such as ELTIFs in Europe and SEC-registered vehicles in the US are increasing investor volumes significantly, moving firms from managing dozens of institutional LPs to potentially thousands of individual investors. This requires a step-change in onboarding, servicing and reporting capabilities.

Collectively, these developments are not only increasing the volume of data, but fundamentally changing its nature, frequency and criticality to decision-making.

The breaking point

Despite significant investment in digital tools, many firms continue to rely on fragmented systems, manual reconciliation and disconnected workflows. As platforms expand through acquisition and product diversification, integrating data across strategies, systems and reporting frameworks becomes increasingly complex.

At an investor level, modern fund structures – particularly those involving secondaries – often require different economic treatments within a single asset. Tracking performance across multiple cohorts is operationally intensive, making consistency in investor-level reporting more difficult to achieve.

Data ingestion presents additional challenges. Transactions frequently involve portfolios from multiple managers, with inconsistent formats and varying levels of detail. The result is non-standardised inputs, reliance on manual extraction and delays in onboarding and validation.

Valuation adds a further layer of complexity. Secondary interests are often acquired at discounts or premiums to reported NAV, requiring new cost bases and alignment of valuation methodologies. Dependencies on underlying manager reporting can also introduce timing mismatches that disrupt reporting cycles.

Beyond operational strain, these challenges have tangible commercial implications. Delays in onboarding, inconsistencies in reporting or reduced confidence in data can directly affect investor experience and decision-making. In an environment where capital is increasingly selective, operational inefficiency is no longer just a back-office issue – it becomes a differentiator in winning and retaining investors.

Taken together, these pressures are not stress-testing existing operating models – they are exposing their limits.

Changing expectations

Meeting these demands requires more than incremental improvements to reporting tools or investor portals. The focus is shifting toward how data is captured, structured and shared across the operating model as a whole – and whether that model is genuinely built for what the market now requires. Operational agility is increasingly defined by the ability to connect centralised data management, automation and AI in a coherent and purposeful way. Yet the effectiveness of these capabilities depends entirely on the quality and consistency of the underlying data. Without that foundation, even the most sophisticated tools will underdeliver.

A centralised data architecture establishes a single source of truth across asset classes – reducing manual intervention, improving consistency and, critically, enabling firms to move beyond reactive reporting toward more proactive insight generation. The result is faster, better-informed decision-making at every level of the organization.

As private market structures continue to evolve, operating models must be capable of supporting a broader and more complex range of vehicles, investor types and reporting requirements. Complexity is not diminishing, and nor are investor expectations – if anything, both are accelerating.

Those that invest now in building scalable, data-centric operating models will be better positioned not only to manage that complexity, but to turn it into a source of competitive advantage. For others, the stakes are clear: infrastructure that cannot keep pace with the market will move from being a constraint to becoming a liability – and in a market this competitive, that distinction matters.

This article was originally published in The Drawdown.