Look-Through Reporting: A New Standard for Investor Transparency

In an era of increasing transparency demands, look-through reporting has emerged as a critical tool for providing investors with deeper insights into the underlying assets of their funds. As regulatory pressures and investor expectations grow, fund managers and intermediaries are rethinking their reporting strategies to deliver greater visibility and value.

The Importance of Look-Through Reporting

Look-through reporting breaks down aggregated data to provide granular details about the holdings within a fund. This approach allows stakeholders to:

• Understand Portfolio Risks: Investors can assess specific exposures to sectors, regions, and asset classes.
• Align with ESG Goals: Look-through data enables evaluation of a fund’s alignment with environmental, social, and governance (ESG) criteria.
• Enhance Decision-Making: Detailed asset-level insights empower institutional investors and wealth managers to make informed decisions.

Key Challenges in Look-Through Reporting

Despite its benefits, implementing look-through reporting comes with challenges:

• Data Fragmentation: Information about underlying assets often resides in multiple systems, making aggregation complex.
• Regulatory Complexity: Compliance with regional regulations, such as AIFMD and SFDR, requires meticulous tracking and accurate reporting.
• Scalability: Generating detailed reports for diverse stakeholders can strain operational resources.
• Customization Needs: Investors have varied preferences for data formats, requiring adaptable reporting solutions.

The Role of Technology in Streamlining Look-Through Reporting

Advanced technology solutions have become crucial in overcoming these challenges. Modern platforms can:

• Aggregate Data Seamlessly: Consolidate information from multiple sources into a unified system.
• Provide Real-Time Insights: Interactive dashboards allow stakeholders to drill down into asset-level details.
• Automate Compliance Reporting: Ensure adherence to regulations through automated workflows.
• Enable Customization: Tailored reporting tools cater to diverse investor needs.

Regulatory Drivers in Europe

Europe has been at the forefront of promoting transparency through regulations that indirectly push for look-through capabilities:

• AIFMD: Requires detailed disclosure of fund exposures.
• SFDR: Mandates sustainability-related disclosures, encouraging asset-level visibility.
• UCITS Framework: Demands clear, investor-friendly disclosures that can benefit from look-through insights.

Adoption by Intermediaries and Institutional Investors

Wealth managers and family offices are increasingly leveraging look-through data to create consolidated portfolio views, offer tailored asset allocation insights, and enhance advisory services. Institutional investors, with their significant holdings, also demand look-through capabilities to evaluate risks and ensure alignment with their investment mandates.

Conclusion

Look-through reporting is no longer optional—it is an essential component of modern fund management. By providing granular insights into underlying assets, it not only meets regulatory and investor demands but also enhances trust and transparency across the investment value chain.

Pivolt, with its advanced data aggregation and tailored reporting capabilities, empowers fund managers and intermediaries to excel in an increasingly transparent and competitive environment by delivering unparalleled insights and seamless compliance.

“Pivolt enables seamless look-through reporting, providing fund managers with unparalleled transparency and granular asset insights to meet regulatory and investor demands.”