The private markets industry has spent a decade pitching diversification. Now comes the harder part: running it. Diversification is no longer just about adding a new private credit strategy; it is increasingly about blending fundamentally different asset classes in a single vehicle, and the numbers show how fast that shift is happening. The five largest listed private markets managers now hold $1.5 trillion in perpetual capital, 40% of combined AUM, up from 35% in 2021. The seven largest private credit platforms have grown AUM roughly 20% annually since 2022, outpacing the market. Much of that growth is being driven by the push to bring alternatives to private wealth, with interval funds and diversified, semi-liquid structures emerging as the vehicles larger managers are using to reach that channel at scale. Larger platforms are increasingly asked to support a broader mix of strategies within the same product. Scale and diversification are converging, and it’s straining platforms that were never built to run more than one kind of investment process at a time.
The Blending of Public & Private Credit
One version of that convergence is showing up directly in client conversations: managers combining public fixed income with private, diversified alternative credit inside a single semi-liquid, often evergreen, vehicle. The concept aims for a smoother liquidity and return profile than a pure private credit fund can offer alone. This product concept offers clear benefits to investors but presents an operating model challenge most platforms are not built for.
Public fixed income and private alternative credit typically run on different technology, operating models, and processes. A public markets order management system built for liquid trading, real-time pricing and automated compliance rules has little in common with a private credit portfolio management system built for loan-level tracking, covenant monitoring and periodic valuation. These platforms were never designed to talk to each other, but a single view across both is not optional. Before allocating new capital, the manager needs to know overall exposure, concentration, and liquidity across the whole portfolio, not just one sleeve, to size the next trade responsibly. After the fact, investors expect one coherent performance and risk picture, not two reports reconciled by hand. Reconciling positions, exposures and performance across both sleeves stops being a nice-to-have and becomes a day-one operational priority, needed pre-trade to make sound allocation decisions and post-trade to report performance investors can trust.
Three Key Operational Considerations for a Multi-Strategy Manager
Analytics and Risk Aggregation – Analytics and risk aggregation become more involved. The same risk factors, credit, concentration, duration, and spread, matter on both sides, but the source data and analytics used to monitor them are entirely different. Public positions draw on market data and pricing feeds updated in real time; private positions rely on loan-level data, covenant terms, and valuations updated on a much slower cycle. Investors and the CIO still expect one coherent portfolio and risk view. Risk tools and data often need rebuilding so they produce a single view instead of two separate reports.
Compliance – Compliance compounds the problem. Public market compliance is mostly system-supported and pre-trade embedded with the OMS. Private credit compliance is more manual and covenant-driven. A single vehicle spanning both needs a compliance framework (often coupled with new technology) that can enforce rules consistently across two very different processes. Existing compliance tools usually need extending, or replacing, to do this well.
Governance and Talent – Managers must consider the following structural questions around governance and talent:
- Should one investment committee oversee both sides, or does each need its own oversight that still rolls up to one view?
- Can one operations team handle both liquid trading and illiquid credit servicing, or does the platform need two distinct capabilities built in from the start?
These are decisions firms need to make deliberately and up front rather than sort out once capital is already coming in.
Design the Model Alongside the Strategy
None of this should discourage the strategy – blended public and private vehicles are a real source of differentiation. But the technology and operating model integration deserves the same design rigor as the investment thesis. We have seen managers sell the product first and try to operationalize it afterward, and that sequencing tends to create exactly the complexity, cost, and risk this article describes, sometimes delaying the launch itself until the end-to-end platform is actually in place. Extending systems, controls, and teams built for one asset class to cover a second is possible, but without a clear plan, it creates friction that gets harder to fix as assets grow.
How Alpha Can Help
Multi-strategy managers need a partner who deeply understands both public and private asset classes, a combination few advisors can genuinely offer. Alpha brings that domain expertise across both, backed by 1,500+ consultants globally supporting operations and technology change across financial services. We have advised many of the leading alternative credit managers building blended public and private platforms, and the vendors that support them.
Our relevant recent engagements include:
Operating Model design: We help managers build the operating model case for change for blended public and private strategies, from current state assessment through target state design and implementation roadmap, covering team structure, process redesign, technology and data strategy.
System Health Checks and Selections: We help managers assess the fit of their current technology, whether that’s a full health check of an existing system or a structured selection process for a new one, then guide them through vendor evaluation, business case development, and implementation planning.
Risk and compliance framework evolution: We help managers redesign risk and compliance frameworks to keep pace with new strategies, from gap assessment through target state design, covering monitoring processes, rule enforcement, and supporting technology.
If you are building a multi-strategy vehicle, or have already launched one and are now refining the operating model behind it, we would welcome a conversation. Reach out to our team.
Authors:
Alex Glaister | Senior Partner, Alpha Alternatives
Bill McMahon | Senior Partner, Alpha Alternatives
Supporting authors:
Elly Wardle | Senior Manager, Alpha Alternatives
Chris Martinich | Senior Consultant, Alpha Alternatives
