logo
It's a bad time to launch first-time funds, but that isn't stopping investors

It's a bad time to launch first-time funds, but that isn't stopping investors

Axios17-06-2025
Conventional wisdom is that now is a terrible time for private market investors to launch first-time funds. But that isn't stopping a slew of folks from trying.
The big picture: Limited partners are seeing a wave of general partners spinouts, and many expect that the trend will outpace industry consolidation, according to a recent Coller Capital survey.
One major reason, they say, is that firms have done a lousy job nurturing homegrown talent.
Coller's questionnaire didn't go a level deeper, but it's not too hard to read "tilted fund economics" in that response. Everyone inside a firm knows who brings in the home run deals, and if that rainmaker doesn't get compensated like one.
By the numbers: 38% of LP respondents said they expect the number of new managers to increase over the next three to five years, compared to just 33% who say they expect it to decrease.
The "increase" cohort was particularly strong among Asia-Pacific respondents (64%).
Coller also found that 36% of LPs report the number of spinout funds within their portfolio has increased within the past few years, while only 3% said it's decreased. The majority said it's remained flat.
Zoom out: Raising a first-time fund is never easy, and many believe the process has become even more challenging as LPs have sought to shrink their manager rosters — preferring to plug larger amounts into multi-strategy firms.
Plus the VC/PE distribution drought that's reduced the amount of available LP capital.
On the other hand, LPs also worry that too much mega-fund exposure won't allow them to beat industry benchmarks — which means many are willing to bet on a few emerging managers to provide alpha.
What they're saying: "It's like the old phrase: people hate Congress but love their congressperson," a veteran LP tells me. "A lot of people are super risk averse (and liquidity crunched) right now, making emerging funds a challenge to raise, but known quantities de-risk the decision for those who are able to put out capital."
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Goldman Picks New Leaders for Japan Capital Markets Business
Goldman Picks New Leaders for Japan Capital Markets Business

Bloomberg

time27 minutes ago

  • Bloomberg

Goldman Picks New Leaders for Japan Capital Markets Business

Goldman Sachs Group Inc. is shuffling part of its Tokyo leadership to boost its capital markets business, as Japan's corporate governance overhaul generates more dealmaking opportunities for investment banks. The Wall Street firm's local securities arm has appointed Yojiro Kunitomo and Yusuke Minowa as capital solutions group co-heads, according to an internal memo seen by Bloomberg News and confirmed by a spokeswoman.

How Chinese Manufacturers Are Countering Trump's Trade War
How Chinese Manufacturers Are Countering Trump's Trade War

Bloomberg

time27 minutes ago

  • Bloomberg

How Chinese Manufacturers Are Countering Trump's Trade War

Listen to Odd Lots on Apple Podcasts Listen to Odd Lots on Spotify Subscribe to the newsletter President Trump has announced tariffs on basically every trading partner. However there is a real sense that the ultimate goal is to hamper the growing perceived economic threat from China. One vision, for how the trade war could be "won" in some sense is by isolating China from the rest of the world. But that's not happening. And in fact, if anything, China is deepening its relationship with other trading nations, particularly in Asia right now. On this episode we speak with Cameron Johnson, a partner at the consulting firm Tidalwave Solutions. Cameron is based in Shanghai, and has an on-the-ground perspective on the state of Chinese manufacturing, having worked alongside producers and end buyers. He talks about the scale of Chinese manufacturing dominance, what Chinese firms are doing to counteract the tariffs, and he argues that in artificial intelligence, China is already way ahead in many respects.

Odd Lots: This Is How Chinese Manufacturers Are Countering Trump's Trade War
Odd Lots: This Is How Chinese Manufacturers Are Countering Trump's Trade War

Bloomberg

time27 minutes ago

  • Bloomberg

Odd Lots: This Is How Chinese Manufacturers Are Countering Trump's Trade War

President Trump has announced tariffs on basically every trading partner. However there is a real sense that the ultimate goal is to hamper the growing perceived economic threat from China. One vision, for how the trade war could be "won" in some sense is by isolating China from the rest of the world. But that's not happening. And in fact, if anything, China is deepening its relationship with other trading nations, particularly in Asia right now. On this episode we speak with Cameron Johnson, a partner at the consulting firm Tidalwave Solutions. Cameron is based in Shanghai, and has an on-the-ground perspective on the state of Chinese manufacturing, having worked alongside producers and end buyers. He talks about the scale of Chinese manufacturing dominance, what Chinese firms are doing to counteract the tariffs, and he argues that in artificial intelligence, China is already way ahead in many respects.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store