Navigating operational pressures in private equity’s shifting landscape
17 Sep 2025
Tahlia Kraefft examines how, against a backdrop of macro uncertainty, liquidity constraints, and rising investor expectations, GPs are under increased pressure to modernise their operations
Image: greenbutterfly/stock.adobe.com
The private equity industry is undergoing profound changes, as it faces rising challenges in fundraising and strategic operations. While fundraising expertise and deal execution skills continue to be vital components, the ability to manage operational complexity has become a determining factor for general partners (GPs) in raising capital and delivering value. Against a backdrop of macro uncertainty, liquidity constraints, and rising investor expectations, GPs are under increased pressure to modernise their operations.
Michele Deely is head of alternatives, EMEA at SEI, an investment and tech solutions provider with US$406 billion in assets under management. She says a GP’s ability to develop operational resilience and invest in technology, recruit cross-functional talent and streamline admin models will determine their success into the next decade in the rapidly evolving landscape.
Despite the significant capital available in the market, fundraising continues to be a tough challenge for many GPs. In 2024, fundraising across all asset classes fell to its lowest level since 2016, according to McKinsey & Company’s 2025 report. It was down 24 percent year over year for traditional commingled vehicles. Fundraising timelines have now become significantly longer in response to limited partners’ LPs’ more cautious re-commitment behaviour and demand for increased transparency. LPs are seeking more detail on track record, operational transparency, not just past performance.
Deely says that despite the current conditions, she anticipates an improved outlook with better fundraising prospects within two years. GPs are now expected to prove institutional readiness, supported by streamlined processes. Fundraising success now requires operational agility and responsiveness to meeting LPs’ needs.
According to Deely, GPs are being pushed to innovate to address these key challenges especially in sourcing new capital. She says the growth in private wealth capital has seen new fund structures and evergreen vehicles be created to accommodate for the growth. She says despite the positives generated by new capital incoming, there are significant operational complexities created especially around liquidity management, regulatory compliance and reporting requirements.
“Back to thinking about having less liquid instruments in an open ended structure — something we did see back in the noughties. That coming back in force now is very challenging for everybody involved in the operations side of it. But definitely is attracting new sources of capital, which is great for the industry.
“All of the sector is still growing within the overall private markets world, but definitely accommodating these new sources of wealth will continue to bring for the next while, a number of operational challenges and trying to get that liquidity match.”
NAV timeline compression as a competitive edge
According to Deely, the ability to deliver timely, consistent net asset values (NAVs) is becoming a litmus test for institutional readiness. NAV reporting cycles are compressing as LPs seek greater transparency and more regular NAV updates. It is also an integral factor for fostering positive LP relations. This is particularly important in open-ended or evergreen funds where liquidity and performance tracking are key. Deely says in the private credit space many managers have taken up a monthly NAV cycle while the hedge fund sector has moved to a daily NAV cycle.
Deely says: “You need to provide a lot more transparency to your LPs and to all of your investor base. And the cornerstone of the industry, in terms of the key product, is the NAV of the fund. If that’s only being issued on a quarterly basis. That’s not fit for purchase, for this type of capital base, and for a lot of funds, it shouldn’t be the current standard anymore.”
Deely says compressing NAV timelines carries a range of benefits from attracting capital to helping GPs become more visible to investors. She says: “There’s been so much evolution in terms of market practices and NAV practices in the last two decades, there’s plenty of room for improvement, so within private markets, it definitely makes you stand out from the crowd.”
Furthermore it helps with fundraising and assists in improving internal processes including automation, straight-through processing. Deely says the streamlining of the processes creates a better environment for both the fund administrator and GP and it aligns with hedge fund best practices. The current private equity landscape is demanding GPs upgrade their back office operations to provide consistent, real-time data and modernise their reporting workflows.
Fragmented admin setups
Many GPs operate with fragmented, multi-vendor fund admin setups, which hamper scalability and lead to greater operational risk. Engaging multiple providers for accounting, reporting, compliance and investor relations creates inefficiencies and data fragmentation. Firms overseeing several funds across different strategies and geographies can lead to operational strain.
Deely says mergers and acquisitions (M&A) activity and the ongoing trend of consolidation with larger firms buying smaller ones or acquiring private market expertise is causing multi-vendor admin setups to become fractured and ineffective. She says significant integration challenges around people, culture, data and systems exist especially in private markets and in hedge funds. Consequently GPs are rationalising service providers and simplifying to integrated fund administration platforms to improve operational control and facilitate faster, more accurate data reporting. Consolidating operations under an unified admin platform has the ability to not only enhance control but sets up firms for scalable growth.
Tech-powered retailisation of alternatives
New access models are remodeling operational needs, and GPs that scale their operations to fit the requirements of a broader, bigger investor base will experience improved growth benefits. Firms that adopt digital and automation technologies for investor servicing and reporting can gain an advantage in commanding this large-scale, lower-ticket investor base.
Deely says new access models are changing operational requirements with private wealth and younger generations in particular demanding digital access, frequent liquidity and high transparency. She says this trend is powering the adoption of evergreen fund models and new operation demands including: liquidity matching, custom investor onboarding and real-time or near-real-time data visibility. The incorporation of data-driven investor features such as digital dashboards, self-service portals is becoming important for retaining investors and ensuring satisfaction.
She notes: “We even see that in the UK in terms of what the pension market is going to open up to alternatives and private markets. Same in the US, and the younger generation is definitely thinking more about wealth accumulation earlier. So the expectations there would be for much more transparency, more digital oriented, much more frequency of liquidity, etc. So it is really that. So it’s an exciting source of new capital, but it’s building the infrastructure and the operating model to be able to accommodate it.”
Tech-powered access models such as digital platforms and tokenisation are democratising private equity and generating new investor pools that include retail and accredited investors.
The rise in smaller investors creates higher transaction amounts and demand for more efficient operations.
More modernised and automated processes are being required by retail investors for onboarding and regulatory compliance.
There is greater demand on back office systems as smaller investors require more regular valuations and the capability to maintain liquidity needs.
Data, talent, and old admin models
Private equity’s move towards transparent operations requires a core shift in how GPs command their data, people and technology. Deely says that firms must modernise legacy systems and establish future-ready platforms in order to “leap frog competition”. Deely says embracing automation, advanced data systems and AI is essential for GPs.
Deely says: “You have to have the energy to keep changing. It is becoming more exciting now than ever before, in terms of that continuous transformation journey — being courageous to make those investment spends to truly transform a model from what it looked like 15 years ago to what it needs to be for the next five years, never mind further out. It’s not for the faint hearted. It’s definitely a reason why there’s been certain players who maybe had a lot of prowess a number of years ago and are dropping in terms of their prominence.”
As operational intricacies rise, GPs experience a talent gap with a greater need for professionals that have both financial expertise and technical knowledge such as data scientists and systems engineers.
“Traditional fund admin models typically focus on quarterly reporting and closed-end funds and now struggle to keep up with more agile investment strategies and regular reporting cycles. Old infrastructure and disjointed systems also create inefficient, poor data visibility and slow decision making.
Deely says it is a really exciting time to be in the industry as it faces an era of significant change with new capital models, new technologies and new investor expectations. She firms need to consider how they can leverage this technological change in the best way. She says along with operational process changes, adoption of digital technologies, investors should keep an eye on tokenisations of real assets. She says it is gaining traction, offering promise for liquidity, fractional ownership and efficiency with regulators actively evaluating frameworks in this space.
As the private equity industry experiences a significant transformation, operational agility is no longer an optional requirement but a key factor contributing to a GPs’ success. GPs that modernise their operational frameworks, from NAV delivery to talent and data management will be best placed for success in a progressively competitive market.
GPs who integrate digital platforms, enhance the operational efficiency of their admin functions and adjust to evolving trends in investor servicing will reap the benefits from the future ecosystem of private equity.
Michele Deely is head of alternatives, EMEA at SEI, an investment and tech solutions provider with US$406 billion in assets under management. She says a GP’s ability to develop operational resilience and invest in technology, recruit cross-functional talent and streamline admin models will determine their success into the next decade in the rapidly evolving landscape.
Despite the significant capital available in the market, fundraising continues to be a tough challenge for many GPs. In 2024, fundraising across all asset classes fell to its lowest level since 2016, according to McKinsey & Company’s 2025 report. It was down 24 percent year over year for traditional commingled vehicles. Fundraising timelines have now become significantly longer in response to limited partners’ LPs’ more cautious re-commitment behaviour and demand for increased transparency. LPs are seeking more detail on track record, operational transparency, not just past performance.
Deely says that despite the current conditions, she anticipates an improved outlook with better fundraising prospects within two years. GPs are now expected to prove institutional readiness, supported by streamlined processes. Fundraising success now requires operational agility and responsiveness to meeting LPs’ needs.
According to Deely, GPs are being pushed to innovate to address these key challenges especially in sourcing new capital. She says the growth in private wealth capital has seen new fund structures and evergreen vehicles be created to accommodate for the growth. She says despite the positives generated by new capital incoming, there are significant operational complexities created especially around liquidity management, regulatory compliance and reporting requirements.
“Back to thinking about having less liquid instruments in an open ended structure — something we did see back in the noughties. That coming back in force now is very challenging for everybody involved in the operations side of it. But definitely is attracting new sources of capital, which is great for the industry.
“All of the sector is still growing within the overall private markets world, but definitely accommodating these new sources of wealth will continue to bring for the next while, a number of operational challenges and trying to get that liquidity match.”
NAV timeline compression as a competitive edge
According to Deely, the ability to deliver timely, consistent net asset values (NAVs) is becoming a litmus test for institutional readiness. NAV reporting cycles are compressing as LPs seek greater transparency and more regular NAV updates. It is also an integral factor for fostering positive LP relations. This is particularly important in open-ended or evergreen funds where liquidity and performance tracking are key. Deely says in the private credit space many managers have taken up a monthly NAV cycle while the hedge fund sector has moved to a daily NAV cycle.
Deely says: “You need to provide a lot more transparency to your LPs and to all of your investor base. And the cornerstone of the industry, in terms of the key product, is the NAV of the fund. If that’s only being issued on a quarterly basis. That’s not fit for purchase, for this type of capital base, and for a lot of funds, it shouldn’t be the current standard anymore.”
Deely says compressing NAV timelines carries a range of benefits from attracting capital to helping GPs become more visible to investors. She says: “There’s been so much evolution in terms of market practices and NAV practices in the last two decades, there’s plenty of room for improvement, so within private markets, it definitely makes you stand out from the crowd.”
Furthermore it helps with fundraising and assists in improving internal processes including automation, straight-through processing. Deely says the streamlining of the processes creates a better environment for both the fund administrator and GP and it aligns with hedge fund best practices. The current private equity landscape is demanding GPs upgrade their back office operations to provide consistent, real-time data and modernise their reporting workflows.
Fragmented admin setups
Many GPs operate with fragmented, multi-vendor fund admin setups, which hamper scalability and lead to greater operational risk. Engaging multiple providers for accounting, reporting, compliance and investor relations creates inefficiencies and data fragmentation. Firms overseeing several funds across different strategies and geographies can lead to operational strain.
Deely says mergers and acquisitions (M&A) activity and the ongoing trend of consolidation with larger firms buying smaller ones or acquiring private market expertise is causing multi-vendor admin setups to become fractured and ineffective. She says significant integration challenges around people, culture, data and systems exist especially in private markets and in hedge funds. Consequently GPs are rationalising service providers and simplifying to integrated fund administration platforms to improve operational control and facilitate faster, more accurate data reporting. Consolidating operations under an unified admin platform has the ability to not only enhance control but sets up firms for scalable growth.
Tech-powered retailisation of alternatives
New access models are remodeling operational needs, and GPs that scale their operations to fit the requirements of a broader, bigger investor base will experience improved growth benefits. Firms that adopt digital and automation technologies for investor servicing and reporting can gain an advantage in commanding this large-scale, lower-ticket investor base.
Deely says new access models are changing operational requirements with private wealth and younger generations in particular demanding digital access, frequent liquidity and high transparency. She says this trend is powering the adoption of evergreen fund models and new operation demands including: liquidity matching, custom investor onboarding and real-time or near-real-time data visibility. The incorporation of data-driven investor features such as digital dashboards, self-service portals is becoming important for retaining investors and ensuring satisfaction.
She notes: “We even see that in the UK in terms of what the pension market is going to open up to alternatives and private markets. Same in the US, and the younger generation is definitely thinking more about wealth accumulation earlier. So the expectations there would be for much more transparency, more digital oriented, much more frequency of liquidity, etc. So it is really that. So it’s an exciting source of new capital, but it’s building the infrastructure and the operating model to be able to accommodate it.”
Tech-powered access models such as digital platforms and tokenisation are democratising private equity and generating new investor pools that include retail and accredited investors.
The rise in smaller investors creates higher transaction amounts and demand for more efficient operations.
More modernised and automated processes are being required by retail investors for onboarding and regulatory compliance.
There is greater demand on back office systems as smaller investors require more regular valuations and the capability to maintain liquidity needs.
Data, talent, and old admin models
Private equity’s move towards transparent operations requires a core shift in how GPs command their data, people and technology. Deely says that firms must modernise legacy systems and establish future-ready platforms in order to “leap frog competition”. Deely says embracing automation, advanced data systems and AI is essential for GPs.
Deely says: “You have to have the energy to keep changing. It is becoming more exciting now than ever before, in terms of that continuous transformation journey — being courageous to make those investment spends to truly transform a model from what it looked like 15 years ago to what it needs to be for the next five years, never mind further out. It’s not for the faint hearted. It’s definitely a reason why there’s been certain players who maybe had a lot of prowess a number of years ago and are dropping in terms of their prominence.”
As operational intricacies rise, GPs experience a talent gap with a greater need for professionals that have both financial expertise and technical knowledge such as data scientists and systems engineers.
“Traditional fund admin models typically focus on quarterly reporting and closed-end funds and now struggle to keep up with more agile investment strategies and regular reporting cycles. Old infrastructure and disjointed systems also create inefficient, poor data visibility and slow decision making.
Deely says it is a really exciting time to be in the industry as it faces an era of significant change with new capital models, new technologies and new investor expectations. She firms need to consider how they can leverage this technological change in the best way. She says along with operational process changes, adoption of digital technologies, investors should keep an eye on tokenisations of real assets. She says it is gaining traction, offering promise for liquidity, fractional ownership and efficiency with regulators actively evaluating frameworks in this space.
As the private equity industry experiences a significant transformation, operational agility is no longer an optional requirement but a key factor contributing to a GPs’ success. GPs that modernise their operational frameworks, from NAV delivery to talent and data management will be best placed for success in a progressively competitive market.
GPs who integrate digital platforms, enhance the operational efficiency of their admin functions and adjust to evolving trends in investor servicing will reap the benefits from the future ecosystem of private equity.
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