From Financial Times:
BlackRock is correct to seek “absolute transparency” on private market fees, as Josephine Cumbo reports (May 30). But while seeking transparency is all very well in principle, the reality is that it is much harder to achieve in practice. The challenge facing pension funds and outsourced asset managers such as BlackRock is that the more demand grows to process private debt assets, the more information is required.
Since private companies, by their very nature, lack public filings, qualitative data is important. Processing these assets in an efficient way is also important, particularly as rising volumes leads to an even greater strain on regulatory reporting. BlackRock and others will soon find that the operational headaches associated with private market assets are very different to reporting on more vanilla assets such as stocks or bonds.
These firms need to find a way to process private market assets alongside their existing investments in an effective and scalable way, otherwise the private market boom could go bust.