3 Reasons Why Your Investment Team Should Adopt an Operational Excellence Program

In all aspects of life, small changes can yield significant results. In the complex alternative investment industry, this rings even truer. Due to the illiquid nature of alternatives, it becomes increasingly challenging to make informed investment selection and portfolio construction decisions. So, to make improvements, we can start small. We can start by making small foundational changes. But, what small foundational changes can we make to consistently enhance investment team performance? 

While we cannot control market volatility or dislocations, we can control how we manage investment-related data. And, gaining control over your alternatives data can have an outsized impact on your investment team’s ability to invest more accurately, efficiently, and confidently. 

Let’s explore 3 reasons why adopting an operational excellence program in the back office can yield better investment outcomes in the front office.

Uncover more data that drives strong investment performance and insights for clients

Operational inefficiencies can significantly impact an investment team’s ability to allocate to managers, deploy capital across portfolios and ultimately deliver the best possible investment outcomes for their clients. Without a sound operational program, an investment team might make decisions based on stale or incomplete data related to open commitments or available cash and exposures.

Be unconstrained by operational inefficiencies

With greater volatility and dislocations in the public and private markets, the ability of an investment team to be unconstrained by operational inefficiencies is more important than ever. Remain exclusively focused on manager research and portfolio management. Always make investment decisions based on asset allocation targets or specific client objectives, and never have operational considerations be a factor. 

Follow the IPS with more ease and confidence

Within the MFO, OCIO, and RIA segments, firms are focused on managing portfolios to strategic asset allocations or model portfolios. By enforcing portfolio standardization and consistency with more rigor, you can ensure that the firm’s best thinking is represented in every portfolio. Maintain your ability to swiftly allocate to a new manager across significant groups of portfolios with confidence.

The results experienced by Canoe Intelligence clients

At Canoe, we’ve supported more than 175 alternative investors and allocators in establishing operational excellence programs. Here are some examples of the results:

GCM Grosvenor	“Canoe technology enabled us to take a fresh look at our downstream processes and identify opportunities for automation and efficiencies. This process re-imagination is well-aligned with our intense focus on enabling our employees, clients, and the industry at large to better leverage data when making investment decisions.” Read the full GCM Grosvenor client spotlight >
Hamilton Lane	“We believe technologies like Canoe [are] critical to implement for the winners of [private markets investments] moving forward. The future of this asset class belongs to those who use data and technology to identify top-performing investment opportunities and construct stronger portfolios.” “We’ve experienced a 20x increase in the number of funds processed by each full-time employee, with additional efficiencies expected in the future.” Download the Canoe x Hamilton Lane case study >
Wetherby Asset Management	“In the last few years, we have had consistent growth in the number of alternative positions we are tracking across our client base. Canoe has helped us manage this growth without needing to add additional human resources, keeping costs predictable and allowing us to scale.” Read the full Wetherby Asset Management client spotlight >
Align Impact	“Canoe enabled a 50% increase in the number of client investment positions without any additional human capital within the first 7 months of implementation.” “We’re experiencing up to a 75% reduction in time spent on managing an even larger volume of alternative investments with the same resources compared to manual workflows leveraged prior to implementing Canoe.” Download the Canoe x Align Impact case study >
Advice Period	“We’ve experienced a 35% increase in the number of funds processed by each full-time employee, with additional efficiencies expected in the future.” Download the Canoe x Advice Period case study >
Lake Street Advisors	“Transitioning to Addepar while utilizing Canoe for our alternative investment data management allowed Lake Street to successfully insource all reporting responsibilities. Prior to discovering Canoe, we were skeptical that we would be able to shift away from our outsourced solution based on the complexity and volume of alternative investment data for our clients. Since implementing both solutions, we were able to produce all of our clients’ investment reports with improved accuracy and in a shorter time period than we had been able to over the previous five years with our outsourced solution.” Download the Canoe x Addepar x Lake Street Advisors case study >
XO Capital LLC	“Automating alternatives documents and data allows us to work with our families more efficiently since our data is better structured and more accurate. The API has provided tremendous benefits as we use external platforms for our reporting and risk groups.” Read the full XO Capital LLC client spotlight >

Explore how you can implement an operational efficiency program at your firm. Request a demo of Canoe today!