Private markets AUM hit $13.1 trillion as of mid-2023, growing roughly 20% per year since 2018 [1]. Dry powder across all private capital strategies reached $3.9 trillion by end of 2023 [2], with PE alone at $2.4 trillion. The secondary market closed a record $162 billion in transactions in 2024, up 45% year-over-year [3]. Sovereign wealth funds, pensions, insurance companies: they're all increasing allocations to private markets.
For emerging managers, this is genuinely good news. But the opportunity comes with expectations that didn't exist even five years ago.
Why companies stay private
This isn't a cycle. It's a structural shift. The median age of companies going public has stretched to 13 years since founding in 2025, up from 10 in 2018 [4]. SOX compliance, quarterly earnings pressure, analyst coverage costs. The burden of being public keeps growing while private capital markets have matured enough that companies can raise hundreds of millions without ever listing.
More companies staying private for longer means more opportunities at every stage: larger seed rounds, bigger Series As, and holding periods that stretch well past the traditional fund cycle. It also means managers need to think carefully about liquidity, because exits are getting pushed further out.
New vehicles are opening access
The boom isn't just in traditional PE and VC funds. In Europe, ELTIF 2.0 opens private market access to retail and semi-professional investors with lower minimums and simpler distribution rules. Semi-liquid structures and continuation vehicles are creating liquidity mechanisms that were basically nonexistent a decade ago.
The secondary market is driving much of this. In the first half of 2025, secondary transaction volume reached $103 billion, up 51% from H1 2024 [5]. GP-led deals, including continuation vehicles, hit $47 billion in H1 2025 alone [6]. These structures let managers generate DPI for existing LPs while keeping their best assets, which matters when only 42% of 2020-vintage VC funds have distributed anything at all as of Q3 2025 [7].
For emerging managers, this means more ways to structure deals and more investor types to access. It also means more operational complexity to manage.
The operational bar keeps going up
Ten years ago you could raise Fund I with a deck, a Rolodex, and a law firm. Today, institutional LPs expect digital onboarding, real-time portfolio reporting, automated capital calls, secure data rooms, and compliance infrastructure they can actually audit.
This isn't arbitrary gatekeeping. LPs have been burned by NAV miscalculations, compliance failures, fraudulent reporting. Operational due diligence is now a formal step in most allocation processes. If your ops don't pass, your track record is irrelevant.
The McKinsey Global Private Markets Report 2026 puts numbers on the consolidation: fewer first-time funds today than at any point in the past decade [8]. Strategic M&A among the 100 largest GPs nearly doubled from $18 billion in 2024 to over $34 billion in 2025. The industry is consolidating around managers who can demonstrate they run a tight ship.
Why launch now anyway
Despite all that, the fundamentals for emerging managers are actually strong. LP demand for private market exposure is outstripping the supply of established managers. Allocators are actively looking for new managers with differentiated strategies, especially in sectors and geographies where the mega-funds don't play.
And emerging managers keep outperforming. The VC Factory's analysis of PitchBook data shows that emerging managers have historically beaten established peers across multiple vintage years [9]. Carta's dataset of 2,500+ venture funds breaks this down by vintage year and fund size, and the pattern holds: smaller, focused managers with skin in the game tend to generate better returns [10].
The catch is meeting the operational standard LPs now expect. The infrastructure that used to require a $500M fund to justify is now available as a service. A manager launching a $5M SPV or $50M fund can run on the same platform as the big shops.
How to position yourself
Three things matter when talking to LPs in this market. First, investment differentiation: a clear thesis about where your edge is and why. Second, institutional operations: can you show that your fund runs on real infrastructure from day one? Third, transparency. LPs want to see their data, understand fees, and trust reporting. With DPI becoming the metric that counts [7], your ability to deliver clean, timely data on capital returned matters more than ever.
We built Infra One to handle the second and third. If you're launching in this environment, let's talk. We'll handle the infrastructure so you can focus on deals.
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