60/40 is history. Why is your tech stack stuck there?

The traditional 60/40 allocation was never going to be the final word in institutional investing.

For decades, bonds served as the institutional anchor: steady cash flow, a hedge against equity drawdowns and a reliable source of portfolio liquidity. This approach was predictable and, for a long time, it worked.

When David Swensen became the Yale endowment manager in 1985, he made a case that would completely reshape the way institutions thought about capital allocation. He suggested that allocators with a long time horizon did not need the liquidity of a traditional portfolio. And by accepting illiquidity, they could access something the traditional markets didn't offer: a premium over competition, exposure to high-growth companies before they went public, and return dispersion that skilled managers could exploit. Swensen grew Yale's endowment from $1.3 billion to over $40 billion during his 36-year tenure.

The market took notice. What started as an experiment at Yale turned into an institutional standard. Endowments, foundations, pensions and the investors that represented them began building portfolios around private markets, in a deliberate hunt for alpha that public markets increasingly struggled to offer.

This trend has not slowed down. According to Aviva Investors' 2026 Private Markets Study, 88% of global institutional investors plan to increase or maintain their private market allocations over the next two years.¹ Endowments managing over $5 billion maintain a 51% average allocation to alternative strategies, per the 2025 NACUBO-Commonfund Study of Endowments.²

This is no longer a small piece of the market. Alternatives now represent a meaningful share of the portfolio across the institutional allocator base. But while this strategy evolved and compounded over the last four decades, the technology facilitating it has not.

Systems built for portfolios of the past

Legacy portfolio management systems were designed around a set of specific assumptions: standard tickers, pricing feeds, uniform liquidity. Data flowed in clean, structured and on time from a small set of market data providers. This system works because it is predictable.

Alternatives rarely are. Capital calls arrive in PDF format, distributions are brought in by email and GP statements can live across dozens of separate portals, each with its own access point and timeline. Valuations may lag by weeks or months. When these systems tried to accommodate growing alternatives allocations, they weren’t rebuilt — they were bolted on.

But bolting on doesn’t work at scale. A 10% allocation to alternatives might be considered an operational nuisance, but at two, three or four times that amount, nuisance turns into material strategic constraint. Alternatives data is too unstructured and too inconsistent to solve with systems optimized around daily NAV. 

Like many operational gaps across the workplace, too often, the solution must be found in manual processes. Analysts log into GP portals one by one, download the documents and extract figures by hand, rebuilding models in their spreadsheets. Cash flow forecasting across private fund portfolios is still largely Excel-based, even amongst sophisticated, large institutions.

Fragmented data, compounded risk

Private markets offer investors the ability to pursue non-correlated returns, market premium and access to growth typically unavailable in public markets — but the challenges are real. When alternative data is fragmented and manually managed, the downstream effects stack up.

These include liquidity planning built on estimates over actuals, look-through exposure across nested fund structures requiring hours of manual reconstruction, and cash flow forecasts disconnected from the live portfolio. Performance attribution becomes nearly impossible to defend when the underlying data was assembled by hand across disparate systems.

The strategies of today's sophisticated investors have outgrown the infrastructure.

The infrastructure you need is finally here

Addepar was purpose-built to handle alternatives market complexity. Our first customers required us to handle diverse asset classes, bespoke ownership structures, fragmented custodians, multiple currencies and complex governance requirements. These customers already had significant exposure to alternatives and we built Addepar knowing we had to address their biggest challenges. 

Rather than replacing an institution's accounting system or book of record, Addepar sits above these systems as an aggregation and analytics layer. Public and private market data exist in the same environment, calculated against the same entity hierarchy and visible in the same view.

Addepar uses advanced document processing capabilities to extract capital calls, distributions and valuations directly from GP documents — across formats and portals, and without manual burden. The analyst who spent days downloading PDFs and validating data in Excel reclaims time for higher value work. 

Addepar also enables teams to run cash flow forecasting and pacing models using actual portfolio data, rather than offline spreadsheets. Look-through exposure across nested fund structures is available on demand. With our privately sourced and proprietary dataset of over 15,000 unique funds, evaluating GP performance against a relevant peer universe no longer requires a time-consuming, manual process.

Re-thinking 60/40

The modern institutional portfolio is not neat, and it's not precisely 60/40 anything. It spans public equities, private equity, credit, real assets and more. But for many sophisticated allocators, alternatives have thoroughly overtaken bonds as the asset class of choice behind public markets, often making up the bulk of the portfolio.

Addepar knows this better than most. Over 40% of assets on the platform today are in alternatives, reflecting both the industry shift and the trust clients place in us to manage what legacy platforms cannot.

The case for private markets was made four decades ago. The infrastructure to run them at scale is finally here.

References:

1. Private Markets Study 2026, Aviva Investors, 2026.
2. 2025 NACUBO-Commonfund Study of Endowments (NCSE), NACUBO, 2025.