The investment landscape for family offices has grown significantly more complex over the years, giving rise to multi-asset class portfolios. Their portfolios are no longer limited to just stocks and bonds. They now routinely include both liquid and illiquid asset classes, such as private equity, real estate, hedge funds, and, increasingly, digital assets. This shift is evident in the data; for example, the Goldman Sachs Family Office report shows that the average family portfolio allocates 31% to public equities and up to 42% to alternatives.
This mixing of assets in a single portfolio presents a significant challenge for family office reporting. Plus, it exposes a substantial flaw in traditional legacy technology. Old systems, typically designed with a single function in mind, often struggle to accurately account for all assets in real-time. This results in inconsistent data, delayed reporting, and the inability to see the “whole picture” across all investments in real-time.
The challenges with managing multi-assets
The shift to multi-asset class portfolios, while beneficial for returns, introduces several operational and technological challenges for family offices. The major hurdle is fragmentation. In other words, family offices often end up having to cobble together various systems and platforms to gain a holistic overview of everything.
That’s because each asset class, from liquid equities to illiquid real estate, often requires specialised administration. That means forcing staff into constant data migration and manual input. The task is not only time-consuming but also highly prone to error, thereby directly increasing operational risk.
Furthermore, these complex asset classes have unique accounting and regulatory requirements. A system designed for stocks and bonds simply cannot handle the complexities of carry, fee structures, or capital calls associated with private equity funds, for instance. This technological misalignment results in delayed and inconsistent reporting.
Instead of delivering real-time, dynamic insights, family office clients are often left waiting for outdated, static PDF reports—data that is stale before it even hits their inbox. Ultimately, the challenge is not the assets themselves, but the inability of traditional technology to unify, process, and report on them in a single, accurate, and timely manner.
Simplifying multi-asset management
Modern family offices must move beyond these limitations to maintain control and deliver high-value client service. The first step in simplifying multi-asset management is to eliminate fragmentation by providing a unified core. This immediate consolidation delivers significant efficiency gains, enabling family office administrators to eliminate the need to juggle multiple systems and perform manual data reconciliations.
Modern family office software, such as FundCount, is built to specialise in diverse asset support.
The unified platform seamlessly integrates portfolio, partnership, and general ledger accounting capabilities. It enables multi-asset management by creating a single source of truth for all complex and diverse asset classes.
In other words, the system can correctly account for everything from calculating the daily P&L on liquid equities to managing complex fee structures and capital commitments for private equity. In addition, the platform’s robust architecture handles complexities such as multi-currency transactions and diverse ownership structures.
For example, when a family office executes a capital call for a private fund, the system instantly updates the real-time general ledger. Then, it will calculate the new basis for the partnership book and ensure all entity structures reflect the latest information. This integrated flow eliminates manual entries, thereby reducing the likelihood of errors. Furthermore, it simplifies tax accounting by providing a consistent, auditable data set across all asset types and jurisdictions.
Enhanced multi-asset reporting
Of course, the ultimate goal of having a unified multi-asset platform is to deliver reports that reflect the actual performance of the entire portfolio. FundCount enhances this crucial capability through its integration with Power BI, which is often available at no additional cost to Microsoft 365 subscribers. The integration provides valuable data visualisation and reporting capabilities that are essential for translating complex multi-asset data into accessible insights.
Key benefits for delivering a consolidated view include:
- Real-time accounting across all asset classes.
- Customisable reports that can be tailored to show specific cross-asset views.
- Control over access and data via permissions by role.
Unified multi-asset control
The increasing prevalence of multi-asset investment portfolios within family offices makes an integrated platform a non-negotiable requirement. Working with fragmented systems only introduces inefficiencies, data inconsistency, and delays the critical information needed to make investment decisions.
By consolidating their diverse asset holdings onto one platform, family offices can achieve a truly accurate, real-time view of their wealth. Systems like FundCount, which use a single system for managing multiple assets and reports, enhanced by Power BI visualisations, are fundamentally changing operations by providing the essential tools to manage complexity and drive better outcomes.