Citrin Cooperman’s inaugural “Emerging Managers Survey Report” reveals that fundraising remains a significant challenge for emerging private equity and venture capital managers.
Despite growing allocations through emerging manager programs, only 35% of respondents have successfully secured such funding, as public pension funds, insurance companies, and corporate pension funds were less frequent contributors, reflecting a preference for more established managers. As a result, family offices (70%) and wealthy individuals (64%) were the top capital sources for emerging managers, followed by fund of funds (43%).
Additionally, 63% of survey participants expect capital raising to remain difficult throughout 2024 due to macroeconomic conditions. Respondents also highlighted increased costs related to compliance, IT, and cybersecurity as major operational hurdles.
But it’s not all gloom for these emerging managers. In the report, which surveyed 97 professionals, over three quarters (76%) of managers believe a niche investment strategy is crucial for capital-raising success. And there is optimism that, over the long term, interest rate cuts could improve exit prospects and boost liquidity, creating a more favorable fundraising environment for these emerging managers.
Access the report here.
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