Allocator Strategic Priorities in 2025 | Northern Trust Insights

The Northern Trust Global Asset Owner Peer Study 2025 highlights allocator strategic priorities in 2025 as institutions navigate a rapidly evolving investment landscape. With 180 global allocators weighing in, a clear narrative emerges: private markets are central to portfolio strategy. However, managing them requires new levels of operational agility, powered by technology.

From Niche to Necessity: Private Markets are a Core Allocation

Once considered an alternative, private markets are now core. A stunning 86% of asset owners allocate to private assets, spanning private equity, real estate, infrastructure, and credit. These investments are no longer just return enhancers – they’re a gateway to long-horizon megatrends like renewable energy, aging populations, and digital transformation.

What’s especially notable: interest in private markets transcends asset owner size. Smaller institutions (<$10B AUM) are just as active as their larger peers. But this enthusiasm brings complexity. Institutions with heavier allocations to private markets are significantly more likely to cite risk management and operational challenges, particularly around data and transparency.

Liquidity Discipline in an Illiquid World

While private markets dominate strategic priorities, liquidity remains mission-critical. Allocators are actively safeguarding portfolio flexibility:

• 60% say liquidity is more important today than a year ago 
• Cash allocations now average 11%, with regional highs of 15% in APAC
• 82% of LPs allow for flexible allocation ranges, typically within a ±10% band

Instruments like short-term investment vehicles and counterparty risk monitoring are increasingly embedded in liquidity playbooks. 

Technology Isn’t Optional – It’s Strategic

Asset owners understand that to manage increasingly complex portfolios, technology must sit at the core of operations.

• 79% are increasing tech adoption to drive efficiency
• 57% are expanding automation
• Yet nearly half lack a dedicated CTO or CISO, creating real execution risk

What’s holding them back? Data integration (50%), data accuracy (46%), and regulatory complexity (31%) top the list of operational pain points. To close these gaps, allocators are focusing their 2025 budgets on tools that support smarter, faster decisions:

• Portfolio analytics (51%)
• Portfolio management systems (49%)
• Compliance & regulatory reporting (48%)

Allocators want a solution that enables investment teams to act with confidence in real time.

Scaling Through Strategic Outsourcing

With internal teams stretched and in-house tech resources constrained, many LPs are turning to outsourcing:

• 27% have outsourced investment office operations, especially among larger LPs
• Most frequently outsourced functions? Document management, regulatory reporting, and trade execution

But allocators want more than just execution. They’re looking for service providers who can add value across the investment stack:

• 50% want help implementing technology and designing operating models
• 47% seek training to fully leverage provider platforms
• 68% and 52% want support in investment research and analytics, respectively

This reflects a growing expectation: outsourcing should be strategic, not transactional. The most valued partners will be those who offer seamless integration, robust analytics, and the ability to evolve alongside their clients.

The Path Forward: Agile, Data-Driven, and Focused on Private Markets

The success of allocator strategic priorities in 2025 increasingly hinge on a few fundamentals:

• Transparent, real-time data
• Technology that scales with complexity
• Liquidity-aware investment frameworks
• External partnerships that extend capabilities without compromising control

Chronograph was built by former private equity GPs and LPs to address the challenges they faced firsthand in portfolio management and analytics. Request a demo to see how Chronograph LP helps allocators scale their operating models, seamlessly manage complex portfolio data, and gain deeper, real-time insights into private equity performance.