APAC Asset Owners: A Move Toward More Integrated Portfolio and Operating Models

APAC asset owners are operating in an investment environment defined by higher portfolio complexity, greater liquidity demands, growing private markets allocations and rising expectations for data-driven decision-making. According to Northern Trust’s 2026 Asset Owners in Focus report, these pressures are pushing institutions to take a more integrated view of investment strategy, operating model design and technology infrastructure. Traditional portfolio construction frameworks are being tested by more volatile markets, changing interest rate expectations, evolving funding needs, and operational demands of less liquid asset classes.

As a result, asset owners are placing greater emphasis on whole-portfolio visibility, scalable operating models, and data foundations that can support faster, more connected decision-making. The shift is not only about adjusting allocations. It also reflects a broader reassessment of the tools, processes, and partnerships required to manage increasingly complex portfolios across public and private markets.

The survey highlights five themes that illustrate how APAC asset owners are responding to these challenges and positioning themselves for the future.

1. Embracing a total portfolio approach

One of the clearest examples of this evolution is the growing adoption of a total portfolio approach. APAC asset owners are moving beyond static allocation models and placing greater emphasis on whole-portfolio decision-making.

Twenty percent of respondents named a total portfolio approach as their guiding investment philosophy, compared with 13% globally. In addition, the number of APAC asset owners relying on overlay strategies jumped from 20% in 2025 to 28% in 2026. Total portfolio approaches are becoming more prominent as institutions seek to connect asset allocation, risk management, liquidity planning, and implementation in a more coordinated way. This shift reflects a broader need for investment frameworks that can respond more quickly to market volatility, funding needs, and changing opportunity sets.

Rather than evaluating asset classes in isolation, asset owners are increasingly focused on how different exposures work together at the total portfolio level. By viewing portfolio decisions through a more integrated lens, institutions are aiming to build greater flexibility and resilience into their investment programs.

2. Private markets as an operating model challenge

The increasing focus on total portfolio management is occurring alongside continued growth in private markets allocations. While private assets offer opportunities for diversification and return enhancement, they also introduce a new layer of operational complexity.

Among APAC respondents, 53% identified operational complexity as the greatest challenge to investing in private markets, while 43% pointed to valuation transparency. APAC’s average asset owner allocates 18% of assets to private markets, underscoring the importance of building infrastructure that can support these investments over time.

As allocations expand, institutions must manage more complex cash flows, valuation cycles, reporting requirements and manager oversight processes. The key challenge is not simply gaining access to private markets opportunities. Asset owners also need the data, reporting, and oversight infrastructure required to invest in private assets at scale and understand their impact across the broader portfolio.

3. Liquidity as a strategic priority

The growth of private markets is also helping elevate the importance of liquidity management. As portfolios become more complex and capital is committed to less liquid investments, maintaining visibility into liquidity positions becomes increasingly important.

Liquidity is increasingly being treated as a strategic asset that supports portfolio flexibility, funding readiness, and operational resilience. Nearly two-thirds (63%) of APAC respondents said liquidity has become more important to their investment strategy over the last 12 months.

Market volatility, interest rate uncertainty, larger private markets allocations and shorter settlement cycles are increasing the need for more active liquidity planning. More than half (52%) named the interest rate environment as a top driver of their focus on liquidity.

The survey also highlights how institutions are putting this focus into practice. When asked why they maintain cash reserves exceeding 5% of total portfolio assets, 55% cited a strategic liquidity reserve, while 42% pointed to market volatility and collateral requirements for derivatives or other obligations.

Asset owners are responding by holding larger cash buffers, shortening duration, and placing greater emphasis on real-time liquidity visibility. Sixty percent say they are increasing allocations to cash positions, while 44% are systematizing the tracking of liquidity terms across alternative investments.

4. Data integration and AI readiness

As investment and liquidity management become more interconnected, the underlying quality and accessibility of data become increasingly important. For many APAC asset owners, data integration has emerged as a prerequisite for both operational efficiency and technology innovation.

Data fragmentation remains one of the most significant technology challenges facing APAC asset owners. Disconnected data sources can limit decision-making, risk management, and operational efficiency, particularly as portfolios become more complex.

Sixty-eight percent of APAC asset owners cited data integration across sources as a top challenge, nine percentage points higher than the global average. An additional 53% pointed to data accuracy challenges. Clean, timely, and consistently structured data is increasingly required to support investment oversight, liquidity planning, private markets reporting, and portfolio analytics.

This data foundation is also central to AI adoption. AI is best understood as an extension of a data-first operating model rather than a standalone capability. Ninety percent of APAC asset owners are actively using AI in some form. When identifying the most promising opportunities, 50% named research, while 48% highlighted investment due diligence, operational due diligence, and document management.

Without reliable integrated data, it becomes harder to apply AI in ways that improve investment and operational outcomes.

The same pattern is visible in digital assets, where APAC asset owners appear interested but measured in their adoption. Thirty-eight percent currently invest in digital assets, below the global average. Rather than signaling a lack of interest, this lower adoption rate may reflect a more cautious posture as institutions wait for clearer regulatory and compliance guidance from the industry. For many asset owners, digital assets remain closely tied to broader questions about governance, operating model readiness, data infrastructure, and risk oversight.

5. Operating model design around control and scale

The need for stronger data foundations, combined with increasing portfolio complexity, is influencing how asset owners think about operational responsibilities. As a result, many institutions are becoming more deliberate about which capabilities they retain internally and which they seek from external providers.

The dividing line is increasingly shaped by the need to retain control over differentiated activities while using scale providers for standardized and repeatable processes.

Activities tied to investment decision-making, alpha generation, data access and data governance are more likely to remain under internal control. Sixty-eight percent retain investment oversight in house, while 23% are actively considering or already outsourcing oversight to an OCIO.

Meanwhile, activities that require scale, standardization, and operational efficiency are more likely to be outsourced. Half of respondents outsource transaction capture and processing for alternative investments as well as trade execution. Forty percent outsource accounting administration for alternative investments, depositary and trustee services, and transfer agency functions.

At the same time, functions such as analytics and performance are moving closer to the investment decision layer as asset owners seek more connected oversight across portfolios, operations and data.

Overall, APAC asset owners are putting more focus on how outsourcing partners can work within the growing complexity of their portfolios and operations. When asked what were the most important factors when choosing a service provider, client service, expertise, technology, products, and financial strength all remain key factors, but the ability to handle complex clients and investment structures significantly jumped year-on-year as a driver, from 18% in 2025 to 43% in 2026.

The next phase for APAC asset owners

APAC asset owners are entering a period in which investment strategy and operating model design are becoming increasingly interconnected. The move toward total portfolio approaches reflects a need for more flexible frameworks that can respond to market volatility, liquidity needs, and changing investment opportunities.

At the same time, growth in private markets is increasing the importance of operational infrastructure, including data management, reporting, valuation oversight, and liquidity planning. Data integration is becoming a foundational priority because it underpins portfolio transparency, AI readiness, and more effective decision-making.

As complexity continues to increase, asset owners are likely to keep refining what they control internally, where they seek external scale and how they connect investment decisions with operational execution. The institutions that can successfully align portfolio construction, operational capabilities, and data infrastructure will be best positioned to navigate the next phase of investment management.