A Governance Lens on Private Markets Service
Anna Dunn Tabke, founder of Leita Advisory, was recently quoted in a FundFire article by Richard J. Chang examining how institutional investors are evaluating service quality from asset managers and advisors in private markets, including the OCIO operations that support increasingly complex portfolios.
The article highlights a growing concern among asset owners: while allocations to private markets have grown dramatically, the operational infrastructure supporting those portfolios has not always kept pace.
As Anna noted in the article:
“In some ways, we’re still stuck in the 90s with private markets reporting.”
Private markets have matured as an asset class, but reporting, transparency, and operational coordination often lag behind the expectations of institutional investors. This shows up as a perpetual pain point in our conversations with Chief Financial Officers, controllers, and other finance staff tasked with managing private markets portfolios, dealing with annual audits, and reconciling investment accounting.
The Operational Side of Private Markets
When institutions evaluate an OCIO or investment advisor, most conversations focus on portfolio construction, access to managers, and investment strategy. Those are important, and its understandably a focal point for Investment Committees. Also important is the back-office experience. The day-to-day experience of managing the private markets portfolio sits with finance and operations, not the Investment Committee.
Private market portfolios introduce operational realities that many institutions must manage carefully:
– Complex capital call and distribution timing
– Manual reporting workflows
– Reconciliation across custodians, managers, and external advisors like OCIOs and consultants
– Delayed and inconsistent reporting
– Portals, portals, portals
For institutions with lean teams, these operational burdens can become a meaningful constraint on how effectively they manage private investments.
Searches Must Address Investment Operations
At Leita Advisory, operational alignment is a core part of our OCIO search and selection process.
When evaluating a potential investment partner, we spend time not only with the investment leadership of an organization but also with the finance and operational staff responsible for implementing the portfolio. Institutions sometimes discover after the fact that a new OCIO service model introduces unexpected changes: a requirement to hire a third-party subaccounting provider, a custodian transition, or limitations around servicing legacy private investments that predate the relationship. Service models vary widely in the amount of OCIO operations support provided to finance teams. Institutions have embraced private markets in a big way, and these funds have very long shelf lives. It’s not uncommon for Leita to see mid-sized endowments and foundations with 30-50 line items in private markets. For institutions with mature private portfolios, multiply any function by 50 and you start to get the idea of why small differences between providers turn into a large issue for finance teams.
At Leita Advisory, we believe the strongest OCIO partnerships strengthen both sides of the investment program. A well-aligned advisor supports not only investment philosophy and portfolio construction, but also the operational infrastructure that allows the institution to manage its investments effectively.
As private markets continue to expand in institutional portfolios, the operational experience of managing those investments will become increasingly important. That perspective often begins with a simple step: asking the finance team what’s working, what isn’t, and how an OCIO can help.
You can read the full FundFire coverage here.
