Alternative investments have taken center stage in portfolio construction, but identifying the right opportunities requires a structured and reliable approach. Consultant databases (CDBs) remain one of the most powerful tools for investment research, yet misconceptions about their effectiveness persist. While challenges like data consistency, market representation, and reporting delays exist, savvy asset managers know that overcoming these obstacles is not only possible but essential for maximizing visibility and securing institutional capital.
Rather than dismissing consultant databases as incomplete, alternative asset managers should view them as strategic assets that—when properly leveraged—serve as a gateway to institutional investors, consultants, and capital allocators. Here’s how to navigate and optimize these platforms for success.
Strengthening Data Accuracy and Reliability
A common critique of consultant databases is the variability in data quality due to manager-reported inputs. However, this challenge can be overcome through proactive data management and transparency:
Ensure Consistent and Timely Updates – Incomplete or outdated information is a key reason some firms underperform in consultant searches. Asset managers who provide quarterly, structured updates on performance, holdings, and risk analytics improve their visibility and credibility.
Standardized Reporting Practices – To address fragmented reporting methodologies, asset managers should align their disclosures with industry best practices, such as GIPS standards, where applicable and outlined by GIPS specific to alternative investments. Clearly outlining calculation methodologies for performance, risk metrics, and benchmarks ensures data integrity.
Use Granular Attribution to Tell a Clear Story – Investors and consultants aren’t just looking at high-level returns; they want to understand why a strategy performs well. Providing detailed performance attribution, including sector, security selection, and risk factor contributions, strengthens an asset manager’s positioning.
The firms that take control of their data—not those that wait for databases to evolve—are the ones that get noticed.
Expanding Market Representation
One argument against consultant databases is that they primarily feature large, well-established firms, leaving mid-market and emerging managers underrepresented. While it’s true that visibility isn’t automatic, it is entirely within a manager’s control to break through:
Optimize Database Profiles for Discovery – Database search algorithms prioritize well-completed profiles, so asset managers must ensure they are maximizing their data fields. A 90%+ completion rate significantly improves search rankings and increases the likelihood of being shortlisted.
Showcase Differentiation Through Narrative – Numbers matter, but qualitative insights—such as investment philosophy, risk management approach, and ESG integration—set managers apart. Consultant databases allow for narrative-driven fields that provide this context.
Leverage Multiple Platforms – Relying on a single database limits reach. Asset managers should proactively engage with multiple consultant platforms to broaden exposure and ensure they are capturing all relevant investor segments.
Rather than seeing databases as exclusive to large firms, asset managers should view them as a level playing field—where those who present themselves effectively gain a competitive edge.
Addressing Reporting Timeliness and Access
It’s often noted that alternative investment data lags public markets due to longer (sometimes quarterly) reporting cycles. While this structural reality exists, proactive managers turn this into an opportunity by staying ahead of expectations:
Supplement Quarterly Updates with Interim Insights – Providing commentary on market conditions, strategy shifts, and notable changes ensures that consultants and investors are not evaluating outdated data in a vacuum.
Emphasize Risk Management and Market Responsiveness – Consultants know that data isn’t real-time, but they value transparency. Demonstrating how a strategy adapts to changing market conditions—rather than simply presenting numbers—builds trust.
Make Data Easily Accessible – Some managers hesitate to disclose sensitive information, but selective disclosure can be counterproductive. Striking the right balance between confidentiality and transparency ensures that consultants and investors have enough data to make informed evaluations without breaching competitive sensitivity.
Those who treat databases as an active engagement tool—rather than a passive reporting requirement—find themselves in more investor searches and conversations.
Overcoming Data Bias and Ensuring Fair Representation
Some critics argue that databases create survivorship and performance biases by favoring established managers or funds that selectively report results. While biases exist in all research tools, the solution isn’t to avoid databases — it’s to use them strategically and with precision:
Control the Narrative by Reporting Proactively – Instead of allowing databases to tell an incomplete story, asset managers should take control by reporting both performance strengths and risk factors, ensuring fair representation.
Highlight Risk Management Practices – Instead of just presenting returns, managers should articulate how they manage volatility, liquidity, and downside risk, ensuring a holistic evaluation of their strategy.
Use Third-Party Verification Where Possible – Firms that align reporting with industry standards or undergo third-party audits enhance credibility and minimize the impact of selection bias.
By actively managing how data is presented, asset managers ensure that their strategies are assessed on their true merits rather than default biases.
For managers navigating the complexities of alternative investment reporting, IMSS simplifies the process with cutting-edge tools like Data-Centrix. Our extensive knowledge in working with alternative asset managers and our manager platform solution ensures data accuracy, maximizes profile completeness, and transform reporting into a powerful competitive advantage—helping you stand out in consultant searches and attract institutional capital.
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