If investing in alternatives is new to you, it is essential that you understand, and are comfortable with your portfolio valuations and the risks associated with your investments. Many times companies opting for building an in-house support infrastructure run the risks and uncertainties of committing significant upfront investment but not being able to fully reap the expected benefits. For example, many financial institutions who have invested heavily into systems may lack experienced staff in the middle-office, risk management or even IT areas to operate these systems. Furthermore, system integration is burdensome as financial institutions often have many unique/stand-alone systems handling different financial products. As a result, risk measures may be under- or over-stated and can ultimately lead to misallocation of capital.
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