A report launched today considers the challenges that institutional investors face when collecting, managing and analyzing information from fund managers.

As trillions of dollars are moved daily based on data that is created, shared and analyzed, many fund managers would do well to re-examine their value proposition and convey it more clearly to investors, said Dynamo Software in a new report.

The report, entitled 2016 Institutional Investor Survey: The Investor Challenge: Turning Data into Information, is based on a survey of 35 asset allocators, of which a significant proportion were family offices.

The goal for investors using third-party managers is to convert fund manager data into “useful information” needed to make important decisions around asset allocation, hiring and firing managers, and portfolio positioning.

Among the report's findings, however, was that nearly 60 per cent of respondents described the task of managing fund communication as “difficult” or “very difficult,” while citing the need to use multiple systems for portfolio management and a reliance on manual data entry as two “significant pain points.” Meanwhile, an overwhelming 94 per cent said they have asked their fund managers for information “above and beyond regular communication.”

“The quality of the information provided to investors by fund managers, as well as the management and care of this information, is paramount to a successful investment management program,” Dynamo said.

Investors also rated their fund managers’ ability to articulate their investment strategy much higher than their ability to differentiate or describe their “edge,” indicating that standing out in a crowded market remains a challenge.

“This problem impacts both the manager as well as the investor – a manager’s strategy can get lost in a sea of similar looking strategies which reduces the chances of an allocation, while the investor is presented with a set of information that is indistinguishable from a manger’s competitors, resulting in confusion and hesitation,” Dynamo Software, formelry known as Netage Solutions, said.

“The transparency demand conflict is further compounded with institutional investors demanding more information from their hedge fund and private capital managers, while managers continue to refrain from providing information that may compromise their investment strategy,” it added.

The report emphasizes the need for greater clarity and transparency from alternative asset managers, as well as more robust, integrated technology to manage said information.