Private equity managers face yet another challenging round of fundraising, with early results for this year already behind the downbeat 2025 pace. And the industry may be approaching a reckoning where the number of funds raised will decrease significantly and managers must either achieve critical mass in general-focus funds or deliver strategies that provide access to unique investments, industry watchers say. Private equity general partners, or GPs, collectively raised $86 billion in the first quarter of this year, according to recent data from PitchBook. That's about 20% of – or already behind the pace of – the $423.4 billion raised last year, which itself was the second straight year when fundraising decreased. Even managers logging fundraising success are encountering headwinds, said Runjhun Kudaisya, a partner in the Private Investment Funds practice at Goodwin. Not only does the overall process take more time, but demands from LPs are leading to longer, more complex negotiations and more specific information requests about co-investments, single-asset special purpose vehicles, and other opportunities that can lower fee burdens. "It's definitely a market where LPs have more negotiating leverage in many ways," she said. "A lot of sponsors have read the tea leaves and are understanding that it will be attractive if they can offer an LP co-invest rights."
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