2024 was a challenging year for fund raising and private equity, but the industry is evolving in fascinating ways. We sat down with Karine, Albert, Aaron and Dan from our award-winning fund services team to discuss the key trends that are set to shape 2025.
2024 was a tough year for fund raising. What stood out to you the most?
Karine: 2024 highlighted how much macroeconomic factors, like high interest rates and geopolitical uncertainties, impact fund raising. Private equity and venture capital funds were particularly hard-hit, with the sluggish IPO market making exits much harder to achieve. Institutional investors have been cautious, wanting to see distributions before committing to new PE funds.
Albert: Agreed. What we are seeing is general partners adapting their strategies, increasingly targeting private wealth investors. Solutions like feeder funds and onshore turnkey platforms are gaining traction, providing private clients access to investments traditionally reserved for institutions.
Has this shift in strategy changed how family offices operate?
Aaron: Definitely. More family offices are actively setting up licensed-manager structures to take control of their investments. We are also seeing a rise in a deal-by-deal-first approach, which has become a popular alternative to raising blind pool funds. This model appeals also to investors who prefer specific opportunities over broader commitments.
What about jurisdictional trends? Are there regions standing out?
Albert: Jurisdictions like Malta, Dubai, Singapore and Mauritius are attracting significant interest for re-domiciliation of managers, advisory companies, and funds. At the same time, Luxembourg, Delaware and Cayman Islands have solidified their position as leading fund domiciles
What investment strategies are gaining traction?
Karine: In terms of asset classes, 2024 was a strong year for private debt and VC fund projects. Sector-wise, we continue to see interest for mid-market SMEs, energy transition, and technology. Additionally, we have onboarded several Web3 and blockchain-focused VC funds, a trend we expect to gain momentum in Europe following successful fund launches in the U.S..
Switching gears to fund administration, are there any noticeable patterns?
Albert: Requests to switch fund administrators have risen significantly this year. Managers are frustrated with issues like poor service quality, high turnover, outdated technology, and unjustified price increases. This has created opportunities for us to showcase the difference that a responsive and innovative partner can make.
Dan: At the same time, we are seeing a major shift in the fund administration landscape. 2025 will be the year when elevated valuations for fund administrators start to correct to more reasonable levels consistent with historical norms. The era of free capital is ending, with the interest burden on leveraged fund administrators prompting a recalibration in the industry.
Looking ahead to 2025, what are your final thoughts?
Dan: Fund administration is undergoing rapid evolution, driven by technological advancements like automation and tokenization, which bring exciting opportunities for increased efficiency and scalability. These changes may tighten margins, but they also allow fund administrators to deliver more streamlined and cost-effective services.
Consolidation in asset management means larger managers often work with established providers, yet significant opportunities remain for fund administrators to support smaller, emerging asset managers with personalized, flexible solutions.
The labour market presents challenges but also encourages innovation in workforce development, training, and the adoption of technologies that can enhance talent retention and efficiency.
Aaron: I agree. The industry is adapting quickly, and those who remain flexible and innovative will thrive. At the same time, we need to stay ahead of trends, particularly in emerging jurisdictions and investment strategies.
Karine: It is about balancing resilience and innovation. By better understanding shifting investor priorities, such as the increased focus on flexibility and transparency, and refining our services accordingly, we can build on last year’s lessons to deliver even greater value in 2025.