Passthrough, a leader in investor onboarding automation for fund managers and other fintechs, today released its 2024 Fundraising Predictions Report. This report, the second of its kind from Passthrough, surveyed 104 fund managers, GPs, investor relations directors, CIOs, and CFOs based in the US to understand the fundraising challenges and opportunities they predict will shape the 2024 private capital landscape.
Specifically, the report looked into the state of capital raising tied to market conditions based on 2024 insights and predictions from fund managers. What they found was hopeful, but slightly cautious. Overall, there is a clear bet on improvement, two-thirds of respondents 66% are planning to increase their target size, however 50% are planning to extend their timeline. It seems GPs believe there is capital to be found, it’s just going to take some time and tactics to find it, as evidenced by 75% of respondents predicting the current market conditions for fundraising will become more challenging in 2024.
The report also found a hopeful trajectory for fundraising targets in 2024. Specifically, more than 77% predict there will be more new funds in the market in 2024 as compared to 2023. While there is likely to be more liquidity and more willing investors, there will be more fund managers competing for a slice of the private capital pie.
Looking ahead at fundraising strategies in 2024, the report surveyed sentiment that showed:
- 35% of respondents are planning to offer new strategies to investors in 2024, such as co-investments. A focus on deepening LP relationships for additional commitments and diversifying the investor base rounded out the top three strategies respondents are planning to implement, with 29.81% and 26.92% respectively.
- 43% of respondents are planning to increase retail investor participation.
- 48% are looking to diversify their investor base by looking for more international investor participation, with the UK being the top target 46.00%
- Almost half, 48% of those surveyed, predict investor demand for liquidity will be primarily driven by economic uncertainties and market volatility.
“Given everything going on in the world, it’s not shocking to see the mixed market signals from our latest report,” says Tim Flannery, CEO & Co-Founder at Passthrough. “Fund managers are coming back to market because you can only sit on the sidelines for so long. 2024 still promises to be difficult, but managers are embracing and coming prepared. We’re happy that Passthrough helps them find more efficiency during the last mile of raising in an otherwise challenging environment.”
Unsurprisingly, one of the biggest topics influencing fund manager’s decisions and preoccupying their predictions is ESG. In fact, 41.35% of fund managers believe that market competitiveness will be the primary driver for ESG integration. This is compared to the 30% who believe regulatory pressure will play a role in adoption.
To read the full report, please visit www.passthrough.com/resources/2024-fundraising-predictions
About Passthrough
Passthrough turns investor onboarding and KYC/AML into solved problems – seamlessly manages subscription document distribution, execution, and compliance in minutes. Founded by former leaders from the Carta Investors Services team Alex Laplante, Ben Doran, and Tim Flannery, Passthrough provides an integrated platform solution that makes the subscription document process turnkey for investors with replicable and verifiable identity information built in for future use. In addition to subscription documents, Passthrough also offers a full service KYC/AML compliance product which collects information from investors so fund managers can remain compliant. To learn more please visit https://www.passthrough.com/.
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