Family Office

Family Offices Re-evaluate Tech To Tap UHNW Growth

Nicole Eberhardt August 25, 2022

Family Offices Re-evaluate Tech To Tap UHNW Growth

Calculating confidence
A new class of technology is changing the game, giving family offices the resources to do more with less – and better. It comes down to building data confidence into the solution. By working with characteristics found in investment data, emerging technology can now measure, calculate and identify what’s reliable, eliminating the need for more research. 

Take investment type, for example. We all know that the month-end share of a stock like Amazon will be accurate and available on a set schedule. The valuation of a property, on the other hand, could be neither. Another data characteristic could be time elapsed between valuations and how market dynamics have changed. And if you really want to drill down, you could even do things like measure the impact of the individual investment manager. 

You can then assess a weight to each characteristic, and after merging them, data is presented in new ways. Some solutions add in machine learning (ML) and advanced algorithms to yield even better data quality which can be tagged with a confidence level. You could even integrate these into a heatmap to provide immediate and easy understanding of data. 

In this way, the time, effort and hours spent questioning data can be dramatically reduced. Add in the ability to automate functions and unearth performance-enhancing data, and family offices who take advantage of the technology could be making the strongest investment possible in their future.

A mission and moment
A new generation of data engines can now record data once and deliver the information to the correct downstream system. This facilitates general ledger, tracking, analytics, modeling and performance. With the previously-mentioned data confidence tools, and heatmap of entities and beneficial owners, a family office can then pinpoint tasks and data that require daily attention. Some solutions even merge accounting and investment books of records to bolster workflows, cull the most relevant information and gain time to effectively oversee assets.

Other interesting features of newer offerings include pacing modelers that improve flow forecasting via flexible capital call, distribution scheduling and simulation. Some solutions have report libraries to simplify management and performance tracking. This can lead to advanced modeling of private investments, hedge funds and stocks, encompassing liquidity, terms and lockups. Knowledge date reporting and audit control can further help family offices rise to the challenges ahead. 

Family offices are on a mission, and this is their make or break moment. They may be at a crossroads, but by investing in technology that empowers their people to do more with less, they’ll make the right choice during a critical time and ensure that their firms are moving in the right direction.   

About the author

Nicole Eberhardt is chief strategy officer for Ledgex. The company provides a multi-asset class portfolio accounting solution for alternative investment firms.

Register for FamilyWealthReport today

Gain access to regular and exclusive research on the global wealth management sector along with the opportunity to attend industry events such as exclusive invites to Breakfast Briefings and Summits in the major wealth management centres and industry leading awards programmes