Limited Partners (LPs) are adopting a more cautious approach to reinvestments, with 88% planning to decline reinvestment opportunities with some existing General Partners (GPs) over the next year, according to Coller Capital’s latest Global Private Capital Barometer.
The shift comes as liquidity constraints and capital availability take centre stage in private markets.
The findings reveal a continuation of 2024’s fundraising trends, with 79% of LPs already declining reinvestment with at least one GP in the past year. While performance issues remain a key factor, 29% of LPs attribute their decisions to their own institutions’ limited capital availability, underscoring the impact of tighter liquidity.
This edition of the Barometer surveyed 107 global investors managing $1.9tn in assets, providing a comprehensive snapshot of the private markets landscape.
LPs are also seeking better communication from GPs. Nearly two-thirds (64%) expressed a need for greater transparency around future capital calls and distribution timelines to better manage their cash flows. Meanwhile, 63% of LPs believe that current GP exit timelines are overly optimistic, and 91% favour the establishment of standing exit committees to guide exit strategies.
Despite liquidity concerns, investor interest in private markets remains robust. Nearly all LPs (96%) plan to maintain or increase allocations to alternatives, with 89% favouring secondaries and 84% focused on private credit. Among the latter group, 37% anticipate boosting their private credit investments in 2025, reinforcing its growing prominence as an asset class.
Looking ahead, LPs see M&A-driven growth as a key value driver for GP portfolio companies over the next two to three years, with 41% identifying it as the primary lever. Over a five-year horizon, digitalisation and AI are seen as transformative opportunities, with 73% of investors citing them as critical to portfolio value creation.
