What Asset Owner CIOs Are Prioritizing: Trends from Institutional Research
The role of the asset owner CIO is changing. While portfolio construction remains the central focus, today’s CIO is responsible for technology governance, operational risk, and fiduciary reporting at a scale and level of complexity that didn’t exist a decade ago.
Getting it right is now a shared challenge for institutional investors across EMEA, APAC, and the Americas.
There are five priorities that define effective investment leadership in 2026. CIOs will have to manage the operational complexity of alternative investments, maintain liquidity discipline across private markets, and modernize data and technology infrastructure. They’ll also have to meet rising demands for fee transparency and build the governance and talent structures to support it all.
Key Takeaways
- Alternative investment allocations have become a structural feature of institutional portfolios globally and require CIOs to build a dedicated operational infrastructure at the fund level.
- Liquidity management is now a board-level concern, and cash flow modeling and private market pacing analysis are core competencies for investment offices.
- As fragmented data systems remain the main technology barrier for institutional investors, establishing a single authoritative data source is critical in supporting faster, better decision-making.
- Fee transparency is no longer a negotiation point but widely adopted industry expectation. Standardized reporting frameworks are reshaping LP-GP relationships globally, and investment committees are demanding comparability across funds.
- The outsourced CIO (OCIO) market has tripled in size over the past decade, underscoring the growing role of outsourced investment management models among institutional asset owners.
In recent years, private markets have gone from something institutional investors held alongside their core equity and fixed income to becoming a structural feature of the portfolio. This shift has now permanently altered what it means to operate at the CIO level.
Private markets now make up an average of 13% of institutional portfolios globally, and 86% of asset owners hold private asset exposure. Within this broader category, private credit has experienced the most dramatic growth, expanding from a small market in the early 2000s to more than $2.5 trillion today.
The Operational Complexity of Private Markets
While most CIOs understand the role of private markets in their portfolios, they don’t always understand what it means for their operations. Unlike public market allocations, private fund investments generate irregular cash flows, custom NAV calculations, and commitment structures governed by capital calls over many years. Managing at this scale requires a middle office infrastructure that doesn’t exist in public markets.
Reporting standards are also changing. The ILPA Reporting Template offers a standardized framework for private equity performance reporting, moving more reporting and compliance expectations into LP operations.
Sourcing and Vetting Top-Tier Managers
As allocations have grown, so too has the rigor required to support them. Systematic manager sourcing, which includes quantitative screening, operational due diligence, and peer benchmarking, is no longer optional at this level.
Allocation decisions being made today have significant consequences. One of the biggest issues is that private market commitments are illiquid by design. As a result, managing liquidity requires a framework grounded in the portfolio's reality rather than its public-market components.
When institutions invest in private markets, they give up some control over when they get their money back. While a fund manager decides when to call and return capital, the schedule rarely lines up with how institutions plan their finances. Managing this gap is no longer just a concern for the finance team but is now a top concern at the leadership level.
Northern Trust's 2025 peer study found that 60% of asset owners say liquidity has become more important to their organization. The global trend of rising rates and geopolitical uncertainty is making it hard for liquidity to price and manage for institutions across North America, Europe, and the Asia Pacific alike.
Cash Flow Modeling and Private Market Pacing
A primary challenge in liquidity management is that a typical private markets portfolio includes commitments to many different funds, each started at a different time and with its own schedule of capital calls and payouts. An institution needs to see all of the cash flows together, not just by fund, to understand what money is coming in, what money is going out, and when.
Leading institutions are building systems that pull this data together into a single picture across their entire portfolio. One way they can relieve pressure on cash flow is by spreading their fund commitments across different years, so that capital calls are staggered rather than hitting all at once.
Investors are also changing their views of how they measure success. According to McKinsey's LP survey, 2.5 times as many investors now prioritize actual cash returns over paper returns as three years ago.
Whatever the strategy, getting cash flow right depends on having reliable, up-to-date data across the whole portfolio.
Most large institutions still run their investment operations on systems that were designed and built for simpler times, before private markets became a core part of portfolios. They use patchworks of disconnected tools that don’t integrate well, require constant manual reconciliation, and slow decision-making. This has become one of the most significant operational risks many asset owners face.
Many are looking to technology spending as a solution. According to the Northern Trust 2025 peer study, 51% of asset owners name portfolio analytics tools as a top spending priority, while 48% cite compliance and regulatory reporting.
Moving Beyond Fragmented Systems
The starting point for most modernization programs is to establish a single, authoritative data source across all asset classes, often called a “golden source.” Without it, different teams are left to work from different numbers, which takes time to reconcile and is prone to errors.
Older investment management platforms in particular struggle with private market data, which arrives irregularly and in inconsistent formats. Larger institutions are increasingly moving toward platforms that pull all of this together into one consolidated view. However, finding the talent to build and run these systems remains a constant challenge.
Practical Applications of AI and the Investment Office
AI can now read and summarize large volumes of private asset documents, enabling portfolio managers to research and monitor positions and automate routine compliance checks.
Third-party research suggests that early implementations of AI tools that directly support portfolio managers can yield productivity improvements of 25-40%, though this figure reflects external research findings rather than a Nasdaq product performance claim. However, institutions will also need clear governance around how AI is used, who is accountable, how decisions get reviewed, and where human judgment retains the final word. Better data and smarter tools don’t just improve investment decisions; they make the cost and rationale behind decisions easier to explain and defend to an investment committee.
While fee pressure isn’t new in asset management, it is intensifying, particularly in private markets where costs are hard to see and compare. The Northern Trust 2025 peer study notes that investment fees are among the top external challenges for asset owners globally, alongside geopolitical instability and interest rate changes.
The response to this pressure isn’t just to charge less. It is to make costs visible, comparable, and defensible. The ILPA Reporting Template 2.0 offers a standardized, globally applicable framework for fee and performance reporting across private funds.
Roughly half of the private markets industry has adopted it, and the CFA Institute notes that the rest now faces mounting pressure to follow as investors increasingly demand consistent, comparable reporting across their manager relationships.
Transparency and Alignment of Interests
The updated template offers investors a detailed, standardized view of what they are actually paying. This includes fee breakdowns, expense allocations, capital accounts statements, and the impact of subscription credit facilities on reported performance. For the first time, this level of detail makes it possible to compare costs across fund managers on a like-for-like basis.
The standard is making a global reach. In Europe, Invest Europe’s investor reporting guidelines were previously aligned with the 2016 ILPA template. However, the 2.0 update extends that global framework further, with adoption happening across EME, APAC, and the Americas. The combination of rising complexity and heightened fee scrutiny is pushing many asset owners to ask harder questions about how their teams are structured, and whether their current staffing models can keep pace.
Modern investment management has become too broad for lean internal teams to cover and manage on their own. As portfolios now span public equities, fixed income, private equity, real assets, and infrastructure, management needs expertise across many areas. For most institutions, the question isn’t whether they need outside help but how much and in which form.
According to the 2025 CIO Outsourced Investment Manager Survey, 46% of institutional asset owners currently outsource their investment management. Nearly three-quarters (73%) of respondents cited a lack of internal resources as their top reason, followed by the need for faster decision-making.
One model that has grown significantly in recent years is the outsourced CIO, or OCIO. The U/S. The OCIO market reached more than $2.5 trillion in 2025, up 16% from 2024. It is expected to reach $5.78 trillion globally by 2030. Another source notes that the market has already tripled in size over the past decade and will see more than $1.3 trillion in new OCIO inflows by 2029.
Bridging the Skills Gap
Headcount isn’t the only challenge. It is the range of expertise now required. Attracting technology professionals capable of supporting digital transformation has become a structural barrier for institutional investors, and 55% of asset owners already use external managers for private market assets, demonstrating how specialized these mandates have become.
Outsourcing vs. Build in House
The decision to outsource or build internal capabilities often revolves around governance. It depends on the organization's strategic ambition, the complexity of its portfolio, and the capacity of its investment committee to provide effective oversight.
In practice, size is a key factor. Organizations with $500 million to $1 billion in assets show the highest outsourcing rates, with approximately 75% either outsourcing or planning to. Meanwhile, larger institutions with $1 billion or more are more likely to maintain hybrid models that keep some functions in-house while outsourcing specialized mandates.
Whether an organization outsources or builds, a common assessment framework can help organizations determine where their infrastructure operations stand and where they need to go.
No two investment offices are at the same stage across every area. The framework below can serve as a diagnostic tool to help investment committees assess where their operations stand and identify the next logical step. Being at a foundational stage in one area while advanced in another is common and reflects resource constraints and prioritization.
| Priority | Foundational | Developing | Advanced |
|---|---|---|---|
| Alternatives | Ad hoc allocation with no dedicated infrastructure | Dedicated PM function and manual quarterly reporting | Integrated reporting with ILPA 2.0 template |
| Liquidity | Monitoring cash balance only | Basic cash flow modeling | Complete view of liquidity |
| Data & Technology | Fragmented systems and spreadsheets | Partial consolidation and some automation | One source and AI tools in use |
| Fee & Transparency | Bespoke reporting | Partial ILPA template adoption | Full ILPA 2.0 alignment and standardized benchmarking |
| Talent & Governance | Small team of generalists | Some specialist roles and an OCIO assessment | Hybrid model |
As many organizations will find themselves at different stages across different rows, trying to advance across all five dimensions at once isn’t practical. Deciding where to focus first is a governance decision and one that investment committees can make when they have a clear picture of where they stand.
The priorities noted are not separated problems with separate solutions. They are all connected. Private market growth makes liquidity more complex. Liquidity complexity demands better data, and better data makes fee structures more visible. All of this requires governance and data structures that are capable of holding it all together.
CIOs navigating the market in 2026 most effectively are those who treat it as a single operational agenda rather than items on a checklist.
What makes this integrated approach possible is having the right data and analytics infrastructure. It gives investment committees a consistent, accurate picture across alternatives, liquidity, reporting, and manager relationships.
Nasdaq eVestment™ is built for exactly this challenge, combining institutional investment intelligence with portfolio analytics designed for the scale and complexity that modern asset owners face.
What are the top priorities for an asset owner CIO?
The top priorities for an asset owner CIO today are: managing the operational complexity of private-market allocations, maintaining liquidity, modernizing data and technology infrastructure, ensuring fee transparency, and building the governance and talent structures needed to support them.
What is the role of an asset owner CIO?
An asset owner CIO is responsible for managing the investment portfolio in the long-term interests of the organization's beneficiaries. Distinct from the tech-focused role of a CIO, it includes fiduciary responsibilities for portfolio construction, manager selection, oversight of investment operations, and reporting to the board or committee.
Why do asset owners use OCIOs?
Asset owners use outsourced CIOs due to a lack of internal resources. Other common reasons include their breadth of specialized experience and their ability to implement decisions faster.
What are the biggest challenges for institutional investors today?
Institutional investors are navigating the operational demands of growing private market allocations, increasingly complex liquidity management, fragmented data infrastructure, fee scrutiny, and geopolitical and macroeconomic uncertainty.