Scaling private markets in discretionary portfolios

Introduction

Private Markets have become an increasingly important component of private wealth portfolios, offering diversification, enhanced returns, and access to unique investment opportunities. The growth in investor interest in alternatives is clear, yet their integration into discretionary mandates remains limited.

Discretionary portfolios play a fundamental role in European wealth management, particularly in the UK, where they are a dominant approach for managing client assets. However, challenges around regulation, suitability, technological capabilities, and specialist expertise have hindered broader adoption of Private Markets within discretionary frameworks.

This paper explores these barriers and presents Titanbay’s solutions to enable UK wealth managers to integrate private markets into discretionary portfolios effectively. By leveraging Titanbay’s regulatory frameworks, suitability assessments, technology, structuring solutions, and expertise, firms can unlock the potential of private markets as a core allocation within discretionary mandates.

The Problem: Barriers to Private Markets Adoption in Discretionary Portfolios

Despite the increasing acceptance of private markets within private wealth portfolios, discretionary managers face several key challenges:

Regulatory & Risk Management Challenges

Discretionary fund managers allocate capital on behalf of clients, raising regulatory considerations around fiduciary duty and risk.

Many UK wealth managers acknowledge the feasibility of private markets within their discretionary mandates but struggle with scaling these investments.

Risk tolerance is a critical factor, particularly for firms that lack prior exposure to private markets within their organisation.

Compliance with regulatory requirements, including suitability assessments and risk profiling, remains a key focus for discretionary managers.

Suitability & Client Segmentation Issues

UK wealth managers must ensure investments align with clients’ circumstances, risk appetite, and objectives.

Effective segmentation of clients based on their suitability is the first step in enabling private markets allocation.

Technology plays a crucial role in scaling suitability assessments and implementing automated guardrails to prevent unsuitable allocations.

Limited Expertise & Education

Historically, limited internal expertise has been a barrier to private markets adoption within discretionary portfolios.

Many firms now leverage in-house multi-asset teams or external investment consultants to access private markets expertise.

Leadership buy-in is essential; successful integration requires a top-down commitment to educating internal teams and ensuring alignment with clients' long-term investment goals.

Technology & Operational Scalability Constraints

To facilitate private markets integration, firms need solutions that align with traditional fund investments as closely as possible.

Key technological capabilities include:
Tracking individual client positions, including soft locks and gating
Application of investor-level rules to ensure compliance with suitability and regulatory requirements.
Seamless integration with existing platforms and data infrastructure to enable reporting, performance tracking, and compliance oversight.

The Solution: How Titanbay Enables Private Markets Integration

Titanbay is uniquely positioned to address these challenges and enable wealth managers to seamlessly integrate Private Markets into discretionary portfolios.

Technology & Digital Infrastructure

Titanbay’s platform enables seamless Private Markets integration by mirroring conventional fund investment processes.

We provide tracking capabilities for individual client positions, automated compliance enforcement, and real-time suitability assessments.

Our technology integrates with existing wealth management platforms, ensuring a smooth operational experience.

Regulatory Structuring Solutions

Titanbay offers regulatory-compliant structures that facilitate investment in Private Markets within discretionary mandates.

Our platform ensures adherence to risk and suitability requirements using a compliance rules engine and portfolio oversight.

Building Expertise & Education

Titanbay partners with wealth managers to provide Private Markets education and expertise, helping firms develop internal capabilities.

We offer direct access to industry experts and investment consultants or allow you to select your own, ensuring firms can confidently allocate to Private Markets.

Our top-down approach ensures leadership engagement, facilitating widespread adoption across organisations.

Flexible Structuring Options

Wealth managers can access Private Markets through multiple structuring options via Titanbay, including:
LTAFs (Long-Term Asset Funds)
ICAVs (Irish Collective Asset-management Vehicles)
SICAV UCI-IIs (Sociétés d'Investissement à Capital Variable - Undertakings for Collective Investment)
RAIFs (Reserved Alternative Investment Funds)
FAIFs (Fund of Alternative Investment Funds)

Titanbay provides structuring capabilities across evergreen and closed-end Private Markets solutions, enabling investment through a range of regulatory frameworks, including LTAFs and RAIFs.

Conclusion & Recommendations

While discretionary portfolios are the cornerstone of UK wealth management, the integration of Private Markets has been slow due to regulatory, suitability, technological, and expertise-related hurdles. However, Titanbay removes these barriers by offering a fully integrated solution that combines technology, regulatory expertise, and operational scalability, enabling wealth managers to unlock the full potential of Private Markets within discretionary mandates.

Key Recommendations for Wealth Managers:

1. Leverage Titanbay’s Regulatory Frameworks – Access compliant investment structures such as RAIFs and LTAFs to facilitate Private Markets integration.

2. Enhance Suitability & Risk Assessment with Titanbay’s Technology – Implement automated suitability screening, risk monitoring, and client segmentation.

3. Utilise Titanbay’s Technological Solutions – Benefit from an intuitive platform that ensures seamless Private Markets investments and operational efficiency.

4. Develop Internal Expertise with Titanbay’s Support – Leverage Titanbay’s training, expertise, and industry partnerships to strengthen Private Markets capabilities.

5. Ensure Leadership Commitment with Titanbay’s Strategic Guidance – Drive adoption from the top down with tailored support from Titanbay’s team of experts.

Titanbay’s expertise and technology enable seamless Private Markets integration, making us the strategic partner of choice for wealth managers looking to scale their alternative investment offerings.