This family office private markets visibility gap creates two distinct operational challenges:
- The first is analytical: calculating standardised private markets performance metrics (IRR, TVPI, DPI) through time-intensive processes that make continuous portfolio-level analysis impractical.
- The second is forward-looking: forecasting liquidity requirements without automated systems that model capital calls, distributions, and portfolio cash availability.
These challenges persist even as 69% of family offices have adopted automated investment reporting systems, up from 46% in 2024. This progress is substantial but hasn’t yet eliminated the combination of manual processes and spreadsheet reliance as the top operational risk family offices cite.
The implication: basic portfolio reporting has been automated, but specialized private markets analytics remain a frontier where manual work persists. The urgency intensifies as private markets account for 29% of average family office portfolios in North America, with 48% citing “improving liquidity” as their primary investment objective for 2025.
Resource constraints compound the challenge: 62% of family offices operate with investment teams of fewer than five employees, managing the same specialized analytics that institutions distribute across dedicated private markets departments.
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The Performance Analytics Frontier
Institutional limited partners automate private investment performance tracking through systems that ingest quarterly cash flows and NAVs, calculate standardised metrics, and update portfolio-level analytics continuously. For example, Cambridge Associates’ Private Investments Database tracks over 98,000 investments across 10,000+ funds, calculating performance from “complete history of underlying quarterly cash flows and NAVs for each fund” through automated data feeds.
Such infrastructure enables institutions to evaluate managers using IRR (internal rate of return accounting for irregular cash flows), TVPI (total value to paid-in capital), and DPI (distributions to paid-in, measuring actual cash returned). All updated automatically each quarter without manual calculation.
The Institutional Limited Partners Association released its first standardised Performance Template in January 2025, noting that whilst “more than half of funds in the industry already employ the ILPA Reporting Template” for basic reporting, the nuts and bolts of executing performance calculations remained unstandardised. The implementation timeline extends to Q1 2027 for first delivery, acknowledging the operational complexity of systematic performance calculation even with standardised frameworks.
Family offices that have automated basic portfolio reporting still face complexity with private markets analytics. For example:
- Capital call notices arrive as PDF emails from GPs.
- Quarterly valuations appear in different formats across different managers.
- Annual audited statements provide lagged data months after period-end.
That means a family office with ten private fund investments receives ten separate reporting streams with inconsistent timing, formats, and levels of detail. Each requires extraction, formatting, and integration into tracking systems. Irregular cash flows distinguish private markets from public securities: whilst equity dividends follow predictable quarterly patterns, private equity capital calls and distributions occur unpredictably based on deal timing, exit opportunities, and market conditions.
Standard portfolio accounting systems designed for regular cash flows struggle with this irregularity:
- IRR computation requires complete cash flow history with precise dating, not just current positions but every capital call and distribution since initial commitment.
- TVPI and DPI calculations need current NAV data that arrives quarterly rather than daily. Portfolio-level aggregation demands consolidating individual fund metrics whilst avoiding double-counting and properly weighting vintage year effects.
Putting it all together manually can consume a significant proportion of family office team resources. For example, a family office investment professional preparing quarterly private markets performance analysis might spend 8-10 hours extracting data from GP reports, updating cash flow records, calculating fund-level metrics, aggregating to portfolio level, and preparing investment committee materials. On a three-person investment team managing public and private portfolios, one person dedicating 40 hours quarterly to private markets analytics represents a significant portion of team capacity consumed by calculations that institutions automate.
Quarterly manual reconciliation can also create lag. By the time a family office completes Q2 performance analysis in late July, Q3 is half over. Automated systems update as GP reports arrive, flagging performance deviations without waiting for quarter-end consolidation. Identifying an underperforming manager one vintage year earlier and redirecting future commitments might preserve significant value over the subsequent fund cycle.
The Liquidity Forecasting Challenge
Institutional investors model private markets liquidity requirements through automated systems that project capital calls and distributions across vintage years, strategies, and managers. Cambridge Associates research indicates institutions assume “20% of initial allocation to private investments annually” as a capital call pacing baseline, whilst noting “this is highly variable in practice” and that average unfunded commitments run at “70% of average private investments NAV.” These calculations happen automatically within portfolio management systems, updating as commitments change and capital calls arrive.
MSCI liquidity modelling demonstrates that diversification across vintages and managers dramatically reduces liquidity pressure. A limited partner with 15% NAV target in buyout strategies diversified across four funds per vintage experiences “95th percentile liquidity drawdown peaks at just over 3% of liquid holdings, posing minimal liquidity risk.” An aggressive 60% target without diversification creates “extreme risk, potentially requiring them to liquidate half of their public-equity portfolio in a single month.” Diversifying even aggressive allocations to four commitments per vintage “more than halves the liquidity buffer at risk.”
Running these scenarios manually — modelling different commitment pacing assumptions, and vintage diversification — would require hours of spreadsheet work per analysis. Automated systems perform the same modelling in seconds.
Family offices recognize liquidity forecasting as increasingly critical. The 48% citing improving liquidity as primary objective represents a sharp escalation from prior years. Expected returns for 2025 averaged just 5%, down from 11% in 2024, with 15% expecting negative returns compared to only 1% the previous year. This caution appears rational: Preqin’s 2025 research notes that four in five PE investors list exits as one of their top concerns, whilst almost half expect 10- to 11-year private equity fund terms. The longer holding periods make liquidity forecasting more critical.
Building a rolling 12-month liquidity forecast requires gathering unfunded commitment data from each GP, estimating deployment pacing based on fund stage and strategy, projecting distributions based on historical patterns and GP guidance, modelling public portfolio dividend and interest income, and incorporating family spending requirements.
Family offices with basic automated reporting may have current portfolio positions visible, but forward-looking cash flow projections still require manual work. An investment committee meeting discussing a CHF 5 million allocation to a new manager cannot easily model how the commitment interacts with existing unfunded obligations without dedicating significant meeting time to manual analysis (or accepting the commitment without comprehensive liquidity impact assessment).
The cost of maintaining excessive safety buffers compounds over time. On a CHF 200 million total portfolio, holding an extra 5% in cash (CHF 10 million) as protection against unpredictable capital calls can involve significant opportunity costs.
Automated forecasting would reveal whether the portfolio actually requires such a buffer. The difference between conservative manual assumptions and data-driven automated forecasting might unlock more of the total portfolio for productive deployment without increasing liquidity risk.
The Remaining Automation Frontier
Family offices expanded teams by 41% in 2022, with 40% planning additional hiring in 2023. Even so, they face persistent talent challenges. In 2025, 70% reported struggling to hire, whilst 65% express concerns about retaining key staff. Clearly, the small team reality creates time constraints that persist regardless of hiring success. Family office investment teams handle public equities, fixed income, alternatives allocation, manager selection, performance reporting, family communication, and board preparation within the same headcount that institutions distribute across specialized teams.
The acceleration in family office technology adoption demonstrates family offices systematically addressing operational inefficiency. The gap between 69% adoption and continued citation of manual processes as top risk reveals where automation frontier lies: not in basic portfolio reporting, but in specialized private markets analytics like IRR calculation from irregular cash flows, portfolio-level metric aggregation across multiple GPs, and forward-looking liquidity forecasting.
Only 25% have adopted wealth aggregation software (more sophisticated platforms designed specifically for consolidated multi-asset, multi-custodian portfolio management including alternatives). This adoption rate, substantially below the 69% with automated reporting, suggests the complexity gap. Basic reporting systems handle standardised public securities well. Wealth aggregation platforms tackle the irregular cash flows, non-standard reporting, and specialised metrics that characterize private markets. The 44 percentage point gap (69% vs. 25%) quantifies the remaining automation frontier.
Institutional Analytics at Family Office Scale
The transformation from manual private markets administration to automated tracking and forecasting requires:
- Comprehensive data consolidation that captures capital calls, distributions, and valuations across all GP relationships,
- Automated calculation of standard performance metrics that update continuously rather than quarterly, and
- Forward-looking liquidity modelling that projects cash requirements against portfolio capacity.
Institutions achieve this efficiency through dedicated teams and enterprise systems designed for institutional scale and cost. Family offices close the gap through purpose-built technology that delivers institutional analytics at family office economics.
The Altoo Wealth Platform addresses the private markets analytics frontier through capabilities designed for family office scale. The platform tracks 40+ asset types including private equity investments, automatically calculating IRR, TVPI, and DPI.
Contact us for a demo to see how the Altoo Wealth Platform extends the efficiency family offices are achieving in basic reporting to specialized private markets analytics.
