The next six to twelve months represent the optimal window for launching a fresh private market fund, according to new insights from Gen II’s Core Alternative Managers’ Mood Index (CAMMI).
This latest research, reflecting responses from over 110 asset managers in the UK and Europe, reveals a CAMMI score of 56.48, signalling sustained optimism for increased investor allocations, rather than a decline, across private equity, venture capital, private debt and real assets.
The Mood Index currently stands at 56.48 – scores above 50 indicate an expected increase in allocations, with higher scores reflecting stronger consensus among managers and greater confidence in these anticipated allocation increases.
The research shows that this 6-12 month period presents a unique opportunity for fund managers to capitalise on a confluence of increased investor allocations to private markets, investor fundraising timelines and favourable market conditions.
Three factors are seen to be driving this urgency.
First, market sentiment is at an all-time high, with almost three-quarters (71%) of fund managers expecting investors to increase or maintain their commitments to private market strategies, positioning the industry for potential growth in the coming year.
Notably, over half of the respondents (52%) anticipate an increase in allocations to Growth Capital, reflecting robust confidence in this sector. Similarly, Venture Capital continues to attract attention, with 45% of fund managers foreseeing increased allocations, indicative of ongoing interest in early-stage and high-growth opportunities. Additionally, 41% of participants anticipate further allocations for both Real Assets and Credit (37%), signalling healthy demand for both.
Fund managers have expressed expectations of allocation increases across almost all major asset strategies, some at high speeds and with a high degree of consensus amongst managers, showing there’s broad-based optimism and readiness for expansion in the private markets.
Second, macroeconomic headwinds demand proactiveness. Overall, 33% of private equity, venture capital, private debt and real assets fund managers express concern over political uncertainty and 25% over a potential recession over the next 12 months.
According to the CAMMI data and consensus among leading economists, if a recession were to occur, it would likely not manifest until Q4 2025 to Q1 2026. This timeline suggests a fast-closing window for fund managers to act strategically before potential economic downturns impact investor sentiment toward allocations.
Managers who proactively adjust their strategies and investments now can position themselves advantageously to navigate the upcoming challenges – and this is largely what fund managers participating in our CAMMI survey are doing.
Almost two-thirds (64%) of managers plan to launch Credit funds, a part of the market Preqin projects to be $2.64tn in AUM by 2029 and achieve a 12% IRR. This shift highlights a proactive approach to securing non-correlated yields amidst potential economic uncertainty. Moreover, managers plan to diversify into Growth Capital (45%), Buyouts (32%), Venture Capital (33%) and Real Assets (27%), taking a diversified approach to generating returns for investors amidst increased headwinds.
Finally, fundraising timelines signal an optimal window to avoid recessionary fears and make the most of investors allocating to private markets now. 74% of fund managers closed their latest fund within 12 months. Almost two-thirds (61%) of private markets funds reported closing within 6-12 months and another 13% in less than six months, so hesitation now could mean losing ground to faster-moving competitors.
Acting immediately allows managers to capitalise on current expected allocation momentum before potential recessionary headwinds emerge in Q4 2025 to Q1 2026 and potentially avoid the prolonged 12-18 month timelines faced by 23% of funds.
Finally, it means managers can attempt to outpace the intensifying competition for institutional investor commitments. Strategic pre-marketing and anchor investor cultivation can compress typical fundraising cycles, enabling fund managers to better align with investor demand windows.
