Private Markets Outlook 2025: LP Perspectives

With a new administration now in office in the U.S. and two years of challenging private equity (PE) deal making and fundraising behind us, could 2025 usher in more optimism for private markets firms? To find out, SS&C Intralinks canvassed the views of different capital allocators in the realm of alternative investments to find out how they are preparing for the next 12 months and what trends they anticipate might play out.

The following perspectives were collated across allocators in the U.S., U.K., Europe and the Middle East. In terms of representation, they include multi-family offices, private banks, endowments and fund of funds.

Where will your biggest focus likely be within alternatives as you consider your allocation plans for the year ahead?

Zaid Al-Qaimi, founder, Patrimium (Dubai-based multi-family office): “The majority of our flow will be in private equity (PE) and venture capital (VC). Our focus will be on the mid-market and lower mid-market; in particular general partners (GPs) who have multiple vintages and have consistently generated higher returns than mega funds. We like established PE managers running uncorrelated strategies, such as sports and music. We will also look for ample capacity for co-investment. If GPs think we’re just going to be a passive limited partner (LP)…that’s a red flag.”

Ray Joseph, chief investment officer, Axxes Capital (U.S. private investment firm): “We expect venture capital, private equity, opportunistic credit and direct lending (first lien senior secured) will benefit from increased spending on artificial intelligence by major tech firms. Investments in infrastructure will likely provide a range of opportunities in areas such as power generation, utilities and data centers/real estate.”

Daniel Kylander, senior investment analyst, Church Commissioners for England (U.K. endowment): “Our focus will be on lower mid-market buyouts (U.S. and Europe), core infrastructure and vanilla credit strategies. Broadly speaking, we see both credit and infrastructure as important private asset classes. However, given the historical dispersion of returns in each of these asset classes, we feel there is less value in “overcomplicating” things and would prefer to take slightly higher asymmetric risk through the buyout portfolio.”

Distribution to paid-in capital (DPI) was a key performance indicator (KPI) for LPs in 2024. How do you assess the liquidity conditions heading into 2025 within private markets?

Ray Joseph: “It will be exciting to see how the next 24 to 36 months develop, given the optimism among GPs and LPs that distributions, the improving regulatory environment, M&A activity, and IPOs may significantly increase in 2025. While expectations are high, activity level may be more muted than hoped, especially in the IPO market. We believe GPs may gravitate towards strategic sales or new techniques like NAV loans and continuation funds to give their LPs liquidity.”

Enrica Dacomo, investment research director, Capital Generation Partners (U.K. private investment firm): “We expect a gradual recovery of realization activity over the course of 2025. Over the last few years, we’ve seen an increase in sponsors finding creative ways to return capital to LPs, including partial realizations, GP-led continuation vehicles, and dividend recaps — which may continue into 2025 as the liquidity momentum builds pace. There is a lot of dry powder in the market to deploy, and financing conditions seem to be easing up compared to 2022-24. This should also increase realization activity and contribute to favorable liquidity conditions in the market.”

Head of private markets strategy (anonymous), Swiss private bank: “Assuming there is no major market event, distributions are expected to be in line with or above the figures of 2024. If the initial public offering (IPO) window reopens widely, and interest rates remain stable or decrease further this should lead to more exits, and thus more distributions.”

What do you expect the fundraising environment to look like in 2025?

Adams Street Partners (U.S. private markets manager): “Early-stage AI-native companies should continue to raise significant capital over the next 12 months, and we also expect a healthy fundraising environment for existing venture-backed companies with strong fundamental growth, attractive unit economics and a visible path to profitability.”

Daniel Kylander: “Fundraising will continue to be a case of big winners and big losers. Those who have invested their prior fund ‘21/’22 vintage with no early liquidity will struggle and we think emerging venture capital managers will really struggle.”

Enrica Dacomo: “In private equity, we expect fundraising to be slower in 2025, particularly in the first half of the year. Most of the managers who raised funds at the peak of the market in 2021-22 have taken time to deploy in a more challenging deal environment, and we do not expect a number of them to come back to market before late 2025/2026. In the illiquid credit space, fundraising activity has been strong recently. There are areas of particular interest for us given their upside potential — CLO equity being one of them.”

Zaid Al-Qaimi: “We think the fundraising environment will warm up in 2025. Under President Trump, there is going to be more risk on the table and more M&A and sponsor-to-sponsor activity. We've seen distributions pick up quite a lot in the last six months. That will continue in 2025 and help fundraising because distributions to paid in capital are indirect evidence that your valuations are realistic.”

In the 2025 SS&C Intralinks LP Survey, 59 percent of investors said that better analytics would improve their relationship with GPs. What technology trend might improve the GP/LP relationship in 2025?  

Daniel Kylander: “We would like to see: 1. More data in [virtual][ data rooms [VDRs]; 2. More proactive outreach by managers to share data and methodology and 3. More standardization in reporting led by groups like ILPA.”

Ray Joseph: “LPs consistently seek more analytics, but the user experience when accessing these reports is almost equally important. Reports are often shared across an allocator's organization and with individuals with varying experience levels in private markets. As more investors enter private markets, it is essential that the presentation of analytics and performance metrics is as transparent and straightforward as possible. Furthermore, we believe analytics should include portfolio company-level information, especially as evergreen and continuation vehicles become more common.”

Zaid Al-Qaimi: “It's something we are currently exploring. The current process of quarterly reporting, with reports issued three to four months after the end of each quarter, needs to be improved. We are looking at various solutions whereby a dashboard could potentially be provided to LPs to facilitate increased transparency and quicker reporting. So far, the fully automated solutions we have seen turn out to have a high percentage of manual processes. We will continue to look for a solution to address this important matter.”

Final thoughts

LP optimism continues for mid-market private equity. However, opinions are divided on how much of an improved fundraising environment GPs might expect in 2025. If exits begin to tick up due to the pressure GPs are facing to put dry powder to work, this could further increase sentiment among private equity investors with respect to the ratio of distributions to capital commitments. If private market democratization continues to gain traction in 2025, as many expect, this could well provide further impetus for GPs to embrace more automation in their reporting process. Increasing transparency for an even wider cohort of investors. 

Click here to access the full findings of the 2025 SS&C Intralinks LP Survey.