Private Markets Race to Modernise Tech Amid AI and Rules
Private markets firms are currently under increasing pressure to overhaul their technology, data, and reporting systems. This transformation is largely driven by regulatory changes and new investor demands that are reshaping the industry landscape in the lead-up to 2026.
The Shift Towards Democratisation of Capital
According to industry insights, one of the most significant changes will be the wider access to private assets for both non-institutional and retail investors. This shift is matched by heightened expectations regarding transparency, integration, and compliance.
As firms look ahead to 2026, the defining force will be the democratisation of capital, which aims to open access to non-institutional and retail investors.
Regulatory Landscape
Regulators in both the US and Europe are already reshaping the investment landscape. In the US, an executive order is pushing for alternative assets within retirement plans, such as 401(k) accounts. Meanwhile, Europe is implementing updates to the European Long Term Investment Fund regime, referred to as ELTIF 2.0, to broaden the investor base.
In the UK, the emergence of Long-Term Asset Fund structures provides new routes for long-horizon investments.
Operational Strain and Modernisation
The changes in regulations are creating operational strain for managers as they adapt to more frequent and granular reporting requirements. Firms are feeling the pressure to modernise operations and enable faster reporting, transitioning from quarterly cycles to near-real-time reporting. This transition includes moving from static PDFs to interactive, data-driven transparency.
Governance Intelligence
Private markets firms are now standardising tools that were once considered innovative. Features such as automated waterfall calculations, integrated compliance workflows, and auditable data lineage are evolving from early adoption to becoming core infrastructure.
Leading firms are focusing on what is termed “governance intelligence.” This model connects every decision and data element in a cohesive structure rather than maintaining isolated processes. Innovations from 2025 are set to become standard requirements in 2026.
The Role of AI in Daily Operations
Artificial intelligence is expected to play an increasingly pivotal role in daily operations. The impact will be seen primarily in how individuals interact with systems rather than in complex fund logic. The trend is shifting from separate chatbots to embedded assistance integrated within workflows.
This evolution signifies a move towards intelligent assistance, with AI-driven, contextual guidance embedded directly into workflows. Systems will now guide users, flag anomalies in real time, and suggest next steps for tasks such as period closes or report generation.
Data Strategy and Integration
As firms confront the challenges of data quality, analytics, and AI outcomes, more organisations are likely to form dedicated data strategy teams. The emergence of these teams will be a crucial trend, as firms recognise the necessity of high-quality, easily accessible data to achieve satisfactory AI results.
The integration of internal systems with external partners will become central to competitive advantage in the private markets sector. Interoperability among general partners (GPs) and fund administrators is essential to unify operational, performance, and investor data into a single model.
Compliance and Limited Partner Demands
Regulatory reforms will compel managers to invest heavily in compliance automation and reporting tools. Reforms like AIFMD II in Europe and transparency measures from the SEC in the US will drive these investments.
Limited partners (LPs) are evolving their assessment criteria for managers, with expectations influenced by digital experiences from other sectors. LPs are seeking intuitive, self-service, and always current reporting experiences, reminiscent of platforms like Netflix.
Hybrid Technology Strategies
Looking ahead, a shift towards hybrid technology strategies is anticipated, combining proprietary tools with next-generation platforms. Forward-thinking firms will retain proprietary models that drive differentiation but leverage external platforms for operational support.
The question is not merely whether to “build or buy,” but how easily firms can extend their core operations to accommodate new asset classes, regulations, and investor demands, positioning themselves effectively in the evolving private markets landscape.
