The Silent Drag on Investment Performance – and How Ops Teams are Paying the Price

If you lead operations at a pension fund, endowment, foundation, or family office, this might sound all too familiar: your analysts, some of them finance grads from top-tier programs, spend most of their day doing what amounts to glorified clerical work. 

Smart, educated and eager to get ahead in the alts industry, they find themselves bogged down in monotonous, seemingly eternal manual work. It’s a daily drudge for them, but it’s also misaligned with your strategic priorities for the business.

According to Broadridge, “Although wealth firms have tried to digitize parts of the alternative investment process, many operations within the middle and back offices are still manual.” Despite the inefficiency and its consequent drag on productivity and performance, it is the quotidian reality for operations analysts at many alternative investment organizations.

The Tip of the Iceberg: Document Overload

Fixing the Fundamentals, a white paper from Fundamatic, explores this industrywide problem in detail. It found that operations analysts at leading allocator firms can spend as much as 75–80 percent of their workday handling fund documents. That includes monitoring portals and inboxes, downloading new files, renaming and categorizing them based on internal taxonomies, and filing them into various platforms: PMSs, CRMs, DMSs (or pick your proprietary system acronym!).

This task may be tedious, but it’s also high stakes. Each fund document contains critical data that underpins investment decisions. If a report is misfiled, mislabeled, or missed entirely, the consequences can ripple through the business. The costs are counted in missed opportunities, compliance risks, and flawed portfolio analysis.

In a world where allocators manage hundreds or thousands of funds across a mix of asset classes and jurisdictions, this risk is multiplied. Moreover, even the best manual process simply can’t scale.

What It’s Costing You

The direct costs of this outdated approach are clear and measurable: wasted time, elevated error rates, and higher compensation paid to analysts performing low-leverage work. However, the indirect costs are just as significant and are arguably even more dangerous.

1. Human Capital Drain

Smart analysts don’t want to spend their careers managing portals. When their experience at work doesn’t match their skill set or ambitions, morale drops and turnover rises. Operations leaders are forced to invest time and money into recruiting and training replacements. It’s a cycle destined to repeat.

As one operations boss put it, they couldn’t justify training analysts in other areas of the business because the document intake process was too critical and too manual.

You didn’t build your operations team to become a retention treadmill. However, in the absence of more efficient, automated systems, that’s exactly what’s happening.

2. Strategic Blind Spots

Responsibility for document and data management may lie with the back-office, but it’s also a linchpin of investment success. Allocators rely on timely, accurate data to:

• Monitor performance
• Adjust allocations
• Manage risk
• Satisfy board and committee reporting obligations
• Maintain compliance and audit requirements

When operations people become overwhelmed, data quality suffers. Even minor gaps or misclassifications can lead to flawed assumptions or delayed actions.

“Our process was very manual, so there was a lot of human error. Documents could be filed in the wrong places and therefore not available to investment managers when needed.”

- An operations leader, describing the state of operations before automation

Scaling Ops Without Breaking It – Or The Bank

Growth is invariably a goal for any alternative investment business, but it’s also a source of operational anxiety. Each new fund, each new strategy, adds volume and strain on the team. There are only so many ways to deal with rising demand:

• Hire more analysts (expensive and hard to scale)
• Outsource (risky and still error-prone)
• Do more with less (not sustainable)

The bottleneck to growth isn’t your investment strategy – it’s your operational plumbing.

Unlocking a Smarter Path Forward

So, what’s the solution?

Until quite recently, manual document and data processing was the only option. Some firms have turned to outsourcing as a way to trim costs, but that comes with its own challenges.

Today, technology offers a better alternative. Smart automation is enabling asset allocators to reimagine operations as a strategic enabler, not just a support function. That shift starts by automating the most repetitive, rule-bound tasks – starting with fund document capture, docs-to-data conversion, classification, and integration.

The idea isn’t to replace people. It’s to liberate them.

With automation technology taking care of rote work, your intelligent and skills analysts gain more time to:

• Improve processes
• Explore data insights
• Support investment teams
• Cross-train across departments
• Contribute to innovation and growth

One Fundamatic client put it this way: “I used to think automation would take away jobs, but the people we have are highly educated in finance and by removing mundane document tasks we can focus their time and skill on much higher value work.”

A Better Ops Model Is Already Here

This isn’t theoretical. Allocators across the industry, from family offices and pension funds to OCIOs and funds-of-funds, have introduced AI-enabled automation and are already seeing the upsides:

• Time savings of 90 percent or more on document tasks
• Improved data integrity with consistent tagging and integration
• Higher retention thanks to more engaging roles for analysts
• Faster investment decisions powered by clean, trusted data

And it starts with fixing the fundamentals.

Stop Reacting; Start Reimagining

The role of operations in alternative investment firms is changing. Those who modernize will gain speed, clarity and competitive advantage. Those who don’t will struggle under the weight of their own data.

Download the full white paper to see how institutions like yours are transforming operations, not by adding headcount but by eliminating friction.