Investment accounting: Build vs buy
04 Mar 2026
Lior Yogev, CEO at FundGuard, examines why firms continue to treat investment accounting infrastructure as strategic IP — and why that assumption is increasingly difficult to justify
Image: FundGuard
A question that continues to surface in conversations across asset managers, pension funds and consultancies is deceptively simple: when should you build, buy, or outsource components of your investment operations technology stack? The answers reveal why so many firms remain trapped by fragmented, high-maintenance systems that do not scale — and what successful modernisation actually requires.
Through the lens of investment accounting, the lessons are clear and they challenge some long-held assumptions about platform selection.
Investment accounting should not your differentiator
Even historically-sophisticated firms that built proprietary platforms years ago are reconsidering those decisions. As the engineers who created these systems retire and true total cost of ownership becomes impossible to ignore, firms are increasingly willing to buy capabilities they once considered untouchable. The strategic insight is fundamental. Firms that are winning reserve ‘build’ for capabilities that genuinely differentiate them in the market. Investment accounting is not one of them.
Alpha comes from investment strategy, client relationships and operational efficiency — not from maintaining a bespoke accounting engine.
Yet many firms continue treating investment accounting infrastructure as strategic IP, pouring resources into systems that deliver no competitive advantage while accumulating mounting technical debt. The accounting calculations, reconciliation logic and NAV processes your firm requires are fundamentally the same as every other firm in your market. The question becomes whether your engineering talent should be focused on rebuilding these commoditised capabilities or on initiatives that actually distinguish you from competitors.
The real cost of building
Building a data platform typically requires substantial multi-year commitments and dedicated engineering teams — and that is only the initial build. Ongoing support, change management, and integration work often exceeds the original implementation cost.
For investment accounting specifically, this translates to constant catch-up on asset class coverage as portfolios expand into private credit, infrastructure, digital assets, and structured products. It means manual reconciliation between IBOR, ABOR and downstream systems when the architecture was never designed for real-time, multi-view accounting. It means delayed feature releases as engineering teams prioritise keeping the lights on over innovation, and integration complexity every time a new custodian, pricing vendor or risk system needs to be connected.
The partnership dimension matters here as well. Selecting a platform provider should be about focusing your team’s energy on what drives business value while leveraging technology built specifically for investment accounting’s complexity.
Data problems disguised as technology problems
Most implementation failures stem from data challenges, not technology limitations. Firms struggle because they lack clear visibility into what data they currently maintain, what is flowing in from external sources, what they are delivering to downstream consumers and the transformations happening at each step. Legacy investment accounting platforms compound this problem. When you run on batch processes with manual reconciliation between books, you lose visibility into data lineage. You cannot see what is transforming where, making any modernisation effort exponentially harder.
Real-time, bitemporal accounting architectures fundamentally change this. When every event processes immediately with complete audit trails and versioning, transparent data lineage is a design outcome rather than an afterthought. You know exactly what changed, when it changed and what downstream impacts occurred.
FundGuard’s architecture addresses this directly: a single accounting engine powers all books of record from one dataset. No reconciliation between systems. No data duplication. No mystery transformations. This transparency makes integration and legacy retirement dramatically simpler because every data element can be traced through the system.
Strategic hybridisation vs accidental fragmentation
Hybrid operating models are increasingly common, with firms mixing build, buy and outsource across different domains. This approach makes sense when applied deliberately: build where you truly differentiate, buy commoditised capabilities, outsource non-core operations.
But many firms have created problematic hybrids within their investment accounting stack itself. Separate systems for IBOR and ABOR. Different platforms for liquid and illiquid assets.
Shadow systems for contingent NAV and manual processes to reconcile everything together. This is not strategic hybridisation. It is fragmentation driven by legacy constraints, not business logic.
For investment accounting, speed to value comes from platforms architected from inception to handle modern portfolio complexity: public and private markets on a single engine, real-time processing with as-of capabilities, multi-currency and multi-jurisdiction accounting from one dataset, and API-first connectivity across the broader technology stack.
The buy advantage only materialises when the platform was purpose-built for the domain. General-purpose data platforms or enterprise resource planning systems adapted for investment accounting require extensive customisation that erodes any speed benefit.
The work that happens after go-live
Integration, change management and governance responsibilities do not disappear when you buy a platform. They shift.
Even with a cloud-native investment accounting platform, firms still own change management across front, middle, and back office teams adapting to new workflows; integration strategy with upstream trade capture, market data and downstream reporting systems; legacy retirement planning to decommission old platforms and eliminate duplicate costs; and governance ensuring the platform operates according to your investment accounting policies.
Firms that treat platform selection as purely a technology decision inevitably underestimate these costs. Firms that approach it as an operating model transformation — with executive sponsorship, cross-functional teams and dedicated change management — see faster time to value and lower total cost of ownership. This is why FundGuard’s implementation methodology addresses organisational dimensions alongside technical configuration.
The platform’s full API architecture, prebuilt integrations with industry systems and comprehensive workflow engine reduce integration complexity — but successful implementations still require clear ownership of business process change.
The strategic choice
Winning firms are clear about where they differentiate and where they leverage best-in-class infrastructure. They are not building bespoke accounting engines to support the same IBOR, ABOR and NAV calculations every other firm requires. They are partnering with platforms that handle those requirements at scale, with continuous innovation, so internal teams can focus on what actually distinguishes them in the market. For asset managers, that may be proprietary investment strategies or client experience. For fund administrators, it is service quality and operational efficiency. For asset owners, it is governance and risk oversight.
None of those differentiators require custom-built investment accounting platforms. They all benefit from modern, cloud-native systems of record that deliver real-time visibility, automated controls and the flexibility to support new asset classes without re-platforming.
Even the most technically sophisticated firms are revisiting decade-old decisions to build platforms that no longer make strategic sense. The question is not whether to modernise investment accounting infrastructure, but whether it will be done strategically or whether firms will continue pouring resources into systems that do not differentiate them in the market.
Through the lens of investment accounting, the lessons are clear and they challenge some long-held assumptions about platform selection.
Investment accounting should not your differentiator
Even historically-sophisticated firms that built proprietary platforms years ago are reconsidering those decisions. As the engineers who created these systems retire and true total cost of ownership becomes impossible to ignore, firms are increasingly willing to buy capabilities they once considered untouchable. The strategic insight is fundamental. Firms that are winning reserve ‘build’ for capabilities that genuinely differentiate them in the market. Investment accounting is not one of them.
Alpha comes from investment strategy, client relationships and operational efficiency — not from maintaining a bespoke accounting engine.
Yet many firms continue treating investment accounting infrastructure as strategic IP, pouring resources into systems that deliver no competitive advantage while accumulating mounting technical debt. The accounting calculations, reconciliation logic and NAV processes your firm requires are fundamentally the same as every other firm in your market. The question becomes whether your engineering talent should be focused on rebuilding these commoditised capabilities or on initiatives that actually distinguish you from competitors.
The real cost of building
Building a data platform typically requires substantial multi-year commitments and dedicated engineering teams — and that is only the initial build. Ongoing support, change management, and integration work often exceeds the original implementation cost.
For investment accounting specifically, this translates to constant catch-up on asset class coverage as portfolios expand into private credit, infrastructure, digital assets, and structured products. It means manual reconciliation between IBOR, ABOR and downstream systems when the architecture was never designed for real-time, multi-view accounting. It means delayed feature releases as engineering teams prioritise keeping the lights on over innovation, and integration complexity every time a new custodian, pricing vendor or risk system needs to be connected.
The partnership dimension matters here as well. Selecting a platform provider should be about focusing your team’s energy on what drives business value while leveraging technology built specifically for investment accounting’s complexity.
Data problems disguised as technology problems
Most implementation failures stem from data challenges, not technology limitations. Firms struggle because they lack clear visibility into what data they currently maintain, what is flowing in from external sources, what they are delivering to downstream consumers and the transformations happening at each step. Legacy investment accounting platforms compound this problem. When you run on batch processes with manual reconciliation between books, you lose visibility into data lineage. You cannot see what is transforming where, making any modernisation effort exponentially harder.
Real-time, bitemporal accounting architectures fundamentally change this. When every event processes immediately with complete audit trails and versioning, transparent data lineage is a design outcome rather than an afterthought. You know exactly what changed, when it changed and what downstream impacts occurred.
FundGuard’s architecture addresses this directly: a single accounting engine powers all books of record from one dataset. No reconciliation between systems. No data duplication. No mystery transformations. This transparency makes integration and legacy retirement dramatically simpler because every data element can be traced through the system.
Strategic hybridisation vs accidental fragmentation
Hybrid operating models are increasingly common, with firms mixing build, buy and outsource across different domains. This approach makes sense when applied deliberately: build where you truly differentiate, buy commoditised capabilities, outsource non-core operations.
But many firms have created problematic hybrids within their investment accounting stack itself. Separate systems for IBOR and ABOR. Different platforms for liquid and illiquid assets.
Shadow systems for contingent NAV and manual processes to reconcile everything together. This is not strategic hybridisation. It is fragmentation driven by legacy constraints, not business logic.
For investment accounting, speed to value comes from platforms architected from inception to handle modern portfolio complexity: public and private markets on a single engine, real-time processing with as-of capabilities, multi-currency and multi-jurisdiction accounting from one dataset, and API-first connectivity across the broader technology stack.
The buy advantage only materialises when the platform was purpose-built for the domain. General-purpose data platforms or enterprise resource planning systems adapted for investment accounting require extensive customisation that erodes any speed benefit.
The work that happens after go-live
Integration, change management and governance responsibilities do not disappear when you buy a platform. They shift.
Even with a cloud-native investment accounting platform, firms still own change management across front, middle, and back office teams adapting to new workflows; integration strategy with upstream trade capture, market data and downstream reporting systems; legacy retirement planning to decommission old platforms and eliminate duplicate costs; and governance ensuring the platform operates according to your investment accounting policies.
Firms that treat platform selection as purely a technology decision inevitably underestimate these costs. Firms that approach it as an operating model transformation — with executive sponsorship, cross-functional teams and dedicated change management — see faster time to value and lower total cost of ownership. This is why FundGuard’s implementation methodology addresses organisational dimensions alongside technical configuration.
The platform’s full API architecture, prebuilt integrations with industry systems and comprehensive workflow engine reduce integration complexity — but successful implementations still require clear ownership of business process change.
The strategic choice
Winning firms are clear about where they differentiate and where they leverage best-in-class infrastructure. They are not building bespoke accounting engines to support the same IBOR, ABOR and NAV calculations every other firm requires. They are partnering with platforms that handle those requirements at scale, with continuous innovation, so internal teams can focus on what actually distinguishes them in the market. For asset managers, that may be proprietary investment strategies or client experience. For fund administrators, it is service quality and operational efficiency. For asset owners, it is governance and risk oversight.
None of those differentiators require custom-built investment accounting platforms. They all benefit from modern, cloud-native systems of record that deliver real-time visibility, automated controls and the flexibility to support new asset classes without re-platforming.
Even the most technically sophisticated firms are revisiting decade-old decisions to build platforms that no longer make strategic sense. The question is not whether to modernise investment accounting infrastructure, but whether it will be done strategically or whether firms will continue pouring resources into systems that do not differentiate them in the market.
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