Fee pressures and general negative sentiment about the state of the current fundraising market are the major obstacles weighing on private equity GPs attempting to bring in new capital, the latest research from law firm Dechert displays.
Those roadblocks have been compounded by a tough exit market and lack of distributions back to LPs, the firm’s 2026 PE Outsee Report stated – although it added that strong year-over-year gains in purchaseout and exit values were fuelling GP confidence in the trajectory of the asset class over the next 12 months.
Fee pressure was selected by 45% of respondents surveyed in the report, which assessed the views of 100 senior-level executives at private equity firms across the globe with more than $2.5bn of assets under management and at least one successful fundraise.
That was followed by the required to balance the gap between the Europe and US on DEI and ESG, on 44%, and negative fundraising market perception on 39%.
It cited one respondent as stateing, “GPs are under more pressure to manage LP expectations, mainly when it concerns the fee structure.
“Fee pressure is on the rise, especially with new assets and diversification requirements increasing further.”
Enticements being offered to LPs include reduced management fees, generous first-close discounts and more fee-free co-investment optionality, Dechert stated.
Another respondent added, “Europe and the US are not on the same page when it comes to ESG.
“The regulatory differences are apparent, with Europe tightening the regulatory requirements. It’s difficult to bridge this gap.”
The negative perception of the fundraising market was most pronounced in the Asia-Pacific region, the report added, being picked out by 45% of APAC respondents, compared to 38% in the US and 35% in Europe, the Middle East and Africa.
Dechert co-head of emerging markets Maria Tan Pedersen stated, “Fundraising headwinds are really driven by exit shortfalls and LPs want to see distributions before recommitting.
“At the same time, we see some trimming of exposure to APAC, with allocations to countries like China reducing.
“Everyone is attempting to find their safe spot in a situation of uncertainty, and that can lead to prolonged fundraising processes.”
Dechert stated 64% of respondents were expanding into different investment strategies as a hedge against a tricky fundraising environment, slightly up from the 59% that stated they were doing so a year ago.
It added that, unlike PE fundraising, private debt fundraising had proven robust during the first half of 2025, coming in well ahead of H1 2023 and H1 2024 figures, citing data from Private Debt Investor.
Infrastructure fundraising has also increased through the first half of the year, with capital raised in H1 2025 already greater than the full year total for 2024, Infrastructure Investor research displayed – highlighting the potential for expanding out beyond traditional PE investing.
Dechert global managing partner Sabina Comis stated, “If you see at the very profitable firms over the past 10 years, they’ve become platforms running various strategies, and their funds under management have become largeger and largeger precisely as a result.
“Adding a strategy, however, is complicated. You have to hire a team with the right track record and be able to articulate a new investment story to LPs.”
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