When Fundraising Slows, Proof Speaks Louder Than Pitch Decks.
If 2021 taught GPs how to collect capital, 2025 is teaching them how to deserve it. The sugar rush is gone. LPs are rationing attention, calendars, and basis points. In this market, “we raise because we raised” is not a strategy. It’s a tell.
Global private markets fundraising fell to its weakest level since 2016, marking a third straight annual decline in 2024. The malaise persisted into 2025: fundraising across asset classes hit its lowest point since 2016. First-time funds collected just $34 billion in 2024, the lowest since 2013, and the median time to close reached a record (≈22 months) in 2024.1 Fee pressure is real: buyout management fees averaged ~1.74 % for 2024-vintage/raising funds,2 and LPs are increasingly demanding co-invest access and better economics. The takeaway isn’t ‘PE is broken’. It’s simpler: capital now insists on evidence.
What this means for pacing and fees
Pacing is reverting to skill, not speed. Average time on the road stood at approximately 20 months, almost double the ~11 months seen pre-pandemic, and 38% of funds took two years or more to close in 2024.3 The “brand halo” no longer shortens a roadshow; differentiated theses and realised outcomes do. On economics, LPs are negotiating earlier and harder: step-downs, bespoke co-invest, tighter clawback mechanics, and selective discounts for size or re-ups. The classic “2 and 20” is now a ceiling few can justify without an operating record that survives diligence. If your deck still leads with logo walls and vintage arithmetic, expect fee compression to finish the conversation for you.
Value creation is the new marketing
Our contrarian rule: raise slower, build faster. In a world of longer holds and higher entry prices, multiple expansion cannot be your plan. Operators must show how revenue grows and margins expand under their ownership, not under hope. The firms that will win the next upcycle are already publishing proof: pricing systems, cross-sell engines, procurement programs, working-capital cadences, and post-close day-30/90/180 scorecards. When the exit window reopens, they won’t need a story. They’ll have telemetry.
The Psychological Gut-check
The psychological gut-check for every GP: Would you invest in your own fund today if your carry depended only on operating improvements you can already run tomorrow? If the answer is uneasy, fix the system before you fix the slide.
What we advise founders and LPs to look for, and what we build internally:
Pacing discipline: target deployment over 3-4 years with explicit exit-readiness gates each quarter. Slower, deliberate investing beats vintage-year bravado.
Fee transparency tied to operating work: co-invest when it accelerates value creation, not as a fundraising coupon. Publish the value-creation backlog alongside the term sheet.
Fundraising will come back. When it does, the market will remember who built muscle while others refreshed pitch decks. In 2025, value creation isn’t a function. It’s your marketing.
References
McKinsey & Company — Global Private Markets Report 2025: Braced for shifting weather.
Preqin (2024). Fund Terms Advisor / Private Capital Fees Bow to Fundraising Pressure: mean management fee rate 1.74 % for buyouts.
Bain & Company. Global Private Equity Report 2025: “Private Equity Outlook 2025: Is a Recovery Starting to Take Shape?”