Smarter data, stronger foundations: navigating the rise of hybrid fund structures
In this interview, Tim Harvey, Head of Client Service for Private Assets, and Allison Whaley, Chief of Staff for Private Assets at Citco Fund Services, discuss how legacy fund administration models are struggling to keep pace with the rise of hybrid strategies, evergreen vehicles and the growing demand for unified, real-time data across asset classes.
Where do legacy admin models struggle to support hybrid strategies and unified data across asset classes?
Tim Harvey: One of the most pressing challenges facing the industry today is the tendency to categorise fund and asset types into buckets. The traditional model operated on the assumption that a private equity fund would always behave like a private equity fund, and a credit fund like a credit fund – fixed in identity and strategy for the duration of its life. Those boundaries are now blurring.
Liquidity dynamics have fundamentally shifted, and managers are demonstrating far greater creativity – both in how they manage and reposition assets, and in the structures they deploy to do so. Secondaries, once a peripheral conversation, have moved firmly into the mainstream, with continuation vehicles and credit secondaries emerging as two significant growth areas in today’s market.
Simultaneously, there is a substantial inflow of retail capital into private markets, driving strong momentum toward evergreen vehicles alongside more traditional closed-end structures.
The historic distinctions no longer exist which creates challenges for managers around selecting the right systems, establishing appropriate reporting methodologies and cadence to transact across asset classes and structures in a coherent way. Subsequently, the industry needs more strategic foresight and operational agility than ever before.
Allison Whaley: We are also witnessing consolidation among asset managers as they strive to offer investors a full breadth of products. To remain competitive, fund administrators to must match that breadth of offering while being able to consolidate data into a single source of truth in a consistent format to feed their investor portals. In today’s landscape, large managers are looking for consistency and scale as they introduce complex structures and move into less familiar asset classes.
Few providers have the scale and cross-asset experience required to deliver this level of integration consistently—particularly across private equity, credit and hybrid strategies.
What additional challenges are created by the complexity of hybrid fund structures?
AW: Hybrid fund structures highlight new and different investor behaviours, with an increased expectation of more detail and faster timelines. Private equity managers may be used to working with institutional investors who are familiar with quarterly reporting, but when complex liquidity characteristics are introduced, managers must reassess their approach to asset valuations, reporting frequency and the granular level of detail.
Higher investor volumes can also be a challenge for private equity managers accustomed to relatively few investors. The manager’s operating model must be able to scale to accommodate the increased demand.
TH: Tied to that is the valuation of underlying assets. Regular closed-ended funds report to LPs quarterly but may only require a valuation of the entire book bi-annually. With hybrid structures, managers need both more regular and robust valuation processes to align with those structures.
It is not just about reporting the end capital balance to LPs. When we think about secondaries for example, there is an expectation to look through to the underlying assets and give investors transparency to that level, because they require that information for their own metrics and reporting. GPs need the right data and the right data provider to ensure they can harmonise this information and report back to managers and investors.
How can data, technology and automation act as enablers to address some of these issues?
AW: Facing calls for more timely reporting and more granular data, with increased investor volume, GPs need a solid data foundation across systems, rather than data siloes. That allows them to produce accurate and timely reporting in a controlled way.
The private assets business has historically relied on spreadsheets or other manual process but today’s requirements cannot be met without leveraging robust data systems and automation.
TH: Processes cannot be effectively automated if relying solely on Excel so having the right infrastructure is critical. Although AI is a prominent market theme, it can only help managers if they hold data in a structured way, preferably in a centralised system in conjunction with a data warehouse. GPs need that data foundation and robust data governance first before they can embrace AI. That data must also be fully reliable and available in near real time.
At Citco, we are applying AI to transform disorganized private markets data into structured, actionable insights underpinned by robust governance and best-in-class systems across every asset class. We must look closely at each step of that process before we can use automation in the right way. We now need a consistent approach to data review for all asset and fund types across different systems to allow for reporting consolidation.
How can providers play a more strategic role in supporting GP growth and innovation?
TH: The traditional fund services role remains unchanged – ensuring the provision of NAVs, assisting with audits and reporting to investors – but that is no longer the whole value proposition. The consolidation, operational sophistication and data capabilities of fund administrators are now key for growth. Providers must provide expertise and creativity to support managers navigating new asset classes, fund types and jurisdictions.
The right provider should be an extension of the GP’s own infrastructure and team. At Citco we see this as a true partnership— strengthening the GP’s operating model through scalable technology and automation, data expertise and strategic operational support. These partnerships motivate us at Citco to work as a collective to solve emerging client problems.
AW: GPs look to us to share lessons learnt from our operational experience across the market, incorporating best practices in a way that can be a powerful value-add. We can be really involved in product design from the outset, having a seat at the table as GPs think about new challenges and the next iterations of their business models.
Finally, what additional complexity do you see going forward?
TH: The convergence of strategies is a significant trend reshaping fund administration. There are implications for complexity as those two worlds converge, and whether that relates to reporting or systems, GPs need a clear path towards handling the data. Many managers will want to merge multiple data sets into one.
There is also a different experience required for managers moving into evergreen vehicles for the first time, who may lack the operational infrastructure to support that type of fund.
Tokenisation is another emerging theme, pointing toward a future where private assets may trade with liquidity characteristics closer to public markets. That will demand real-time infrastructure and further increase the level of granularity required.
AW: The additional complexity we see is around risk management and governance across hybrids and structures that were not historically designed to work together. As strategies blend private, semi-liquid and liquid elements, robust governance and risk frameworks become critical—ensuring that decisions are consistently applied, auditable and transparent across asset classes. That applies to everything discussed today – valuations, liquidity management and investor communications.
As complexity grows, the margin for error or inconsistency becomes much smaller. Managers will need operating models that support transparency and clear accountability across those decisions, not just the ability to produce outputs.
Ultimately, the convergence of strategies, structures and investor expectations is reshaping the operating model for private markets. Success will depend on scalable infrastructure, high-quality data and experienced partners capable of supporting managers through increasing complexity.
This article was originally published in Private Equity International.