What fundraising now tells us about private markets

Capital is still available, but investors want clearer evidence on liquidity, valuation, governance, and reporting before they commit.

Private markets are becoming harder to navigate, and fundraising is where the pressure is showing most clearly.

For much of the last decade, managers benefited from low interest rates, abundant liquidity, and rising valuations. Returns were amplified, exits were easier to achieve and capital was easier to raise. That backdrop has changed. Managers now need stronger underwriting, better reporting infrastructure and clearer evidence of how they manage risk, liquidity, and investor expectations.

In Ocorian’s latest private capital research*, 62% of managers say raising capital has become slightly more difficult versus last year, while 32% say it has become slightly easier. Capital is still available, but investors are asking harder questions before they commit.

Exit timing is one of the main constraints. Managers cite regulatory delays or complexity (66%), portfolio companies not yet being exit ready (53%), limited buyer appetite (50%), uncertain market conditions (47%), and valuation gaps (44%) as the main factors affecting exits. Liquidity can no longer be treated as a given. Managers have to plan for how capital will be returned, recycled, or held for longer.

That is helping to bring secondaries and continuation vehicles further into the mainstream. These structures are being used to manage longer hold periods, create liquidity options and retain ownership of assets that managers do not want to sell into weaker markets. While most respondents expect exit activity to increase overall, around one in five point specifically to continuation funds and alternative structures remaining central to the exit mix.

The investor base is also changing. Managers expect the most new launches over the next 24 months to come through hybrid or perpetual structures with gates (63%), evergreen or open-ended funds (56%) and semi-liquid funds with periodic liquidity (40%). The main reason is access to new distribution channels, including wealth (47%), followed by regulatory or tax considerations (41%).

These products create a harder operating problem. They offer more regular access, more frequent communication and, in some cases, some form of periodic liquidity. But the underlying assets remain illiquid. That puts more pressure on valuation processes, liquidity policies, investor reporting and governance. Managers have to give private wealth investors a more accessible experience without weakening the controls institutional investors expect.

Investor reporting is already one of the clearest signs of that pressure. More than half of respondents, 56%, rate reporting requirements as “extremely challenging”. As managers launch more product types, serve more investor groups and operate across more jurisdictions, the reporting burden is likely to increase further.

The specific barriers to fundraising show how much the process has changed. The biggest challenges are increased due diligence requirements (63%) and regulatory uncertainty (57%), followed by overallocation constraints (48%) and LP reallocation away from alternatives (38%). Managers are not just competing for capital; they are competing to prove that their strategy, governance and operating model can withstand closer scrutiny.

The market is not simply consolidating around the largest platforms. In fact, 51% of Ocorian’s survey respondents say investors are increasing the number of specialised managers they allocate to, while 42% report stable manager relationships and only 5% report consolidation with fewer managers. That suggests investors are still willing to back specialist managers, provided they can show a clear strategy, credible controls and reliable information on performance, risk and valuation.

Average commitment sizes are also changing. Nearly half of Ocorian’s survey respondents say average investor commitments have increased over the past two years, mostly modestly. Combined with more demanding due diligence, this points to a fundraising market where investors may be writing larger cheques, but only after a deeper review of a manager’s track record, reporting quality, governance and differentiation.

LPs are also using terms and economics to secure more favourable arrangements. Fee changes are coming less through headline cuts and more through performance-based economics (37%), tiered fees by commitment size (35%) and bespoke arrangements (24%). Co-investment is now a standard feature of institutional fundraising: 53% say co-investment rights are critical in most institutional mandates.

These concessions show how fundraising is becoming more closely tied to alignment and access. Managers are being judged not only on past performance, but on whether they can offer co-investment opportunities, provide transparent reporting, explain valuation decisions and support more tailored investor relationships.

Scale can help. Larger platforms may be better placed to invest in data systems, reporting teams and new product structures. They can also offer LPs access to a broader range of strategies. But the research suggests that specialisation still matters. Managers can remain competitive if they show strong operational controls and provide clear, auditable information on risk and valuation. Valuation methodology is now the most prominent area of risk in investor due diligence, cited by 51% of respondents.

Technology is adding another layer of pressure. AI and data tools are being applied to portfolio monitoring, investor reporting and compliance workflows. But managers also see challenges in integrating new technology with legacy systems (70%) and adapting to AI governance requirements (57%). The issue is not simply whether firms adopt new tools, but whether they can connect them to existing fund accounting, reporting and compliance processes in a controlled way.

Private markets are moving into a more demanding phase. Liquidity has to be planned. Fund structures have to match the needs of both institutional and wealth investors. Reporting has to be faster, clearer and more reliable. Valuation policies have to stand up to closer scrutiny. Managers can no longer rely only on market conditions, multiple expansion or past performance to support fundraising.

By 2028, managers expect operational excellence – not investment performance alone – to be the defining source of competitive advantage. In practice, that means stronger reporting, clearer valuation governance, better liquidity planning, more robust compliance processes and the ability to give investors confidence before, during and after allocation.

*In May 2026 Ocorian commissioned independent research company PureProfile to interview 300 senior executives at private equity fund managers, including 210 in the US and 90 in the UK, Switzerland, Germany, Italy, Spain, Poland, Sweden and Bulgaria. The total assets under management at firms they work for was $3.511 trillion. They included 150 working at emerging firms managing up to $500 million, 90 at mid-sized firms managing between $500 million and $10 billion and 60 at large firms managing more than $10 billion.