Raising a fund in a selective market: what has changed for mid-sized and first-time managers

Corvus Management · As at July 2026

European closed-end fundraising fell 41% in 2025, partly because several flagship funds had closed the year before.¹ For private equity alone, PitchBook data put 2025 at a ten-year low, with no European fund closing above €5 billion.³ The first months of 2026 brought no turnaround: only 23 European private equity funds reached a final close in the first quarter, raising about €18 billion.² The squeeze is uneven. Commitments are going to fewer, larger managers, and the smallest funds are losing share. For a first or second fund, the capital exists. The hard part is reaching the investors still willing to start a new relationship.

Questions sponsors are asking

Why are investors so selective?

Mainly because cash is not coming back. Investors fund new commitments from the distributions of older funds, and with exits recovering slowly, distributions are below plan while large undrawn commitments limit what is left.² They are also consolidating, and the largest platforms are set to take most new money this cycle.² A new manager competes with a re-up to an existing one, which is an easier case to make to an investment committee. Within that, specialists with a clear edge still find support; mid-market generalists feel the most pressure.² Around 70% of recent commitments went to managers investors already back, and distributions have stayed below 15% of NAV for four years running.⁴

How long should we plan for?

Eighteen months at least. Private equity funds that closed in 2025 spent 18.5 months on the road on average, a little below 20.6 months in 2024 but well above the previous five-year average of 15.7 months.⁵ A manager budgeting for twelve months can run out of money or momentum before the final close.

Do we need an anchor?

For most first funds, yes. A sizeable first commitment gives later investors comfort. Anchors increasingly ask for a share of the manager's revenues or other economics in return, especially in first funds and new strategies.¹ Those terms have to leave enough on the table for the investors who come next.

What if we have no fund track record?

Show deals instead. One or two transactions done deal by deal, or seeded into the fund, prove the strategy and give investors assets to diligence rather than a pipeline to take on trust. Document deal-level performance carefully, including what each team member did.

Does co-investment help?

It is one of the strongest incentives a manager can offer right now.¹ Investors get more exposure to the best deals at lower cost, and a chance to test the team before committing more.

Are there alternatives to a commingled fund?

Some investors want a separate account or a vehicle limited to one or a few deals, and that capital can sit next to a smaller main fund.¹ ELTIFs open access to private banking and wealthier individuals. Luxembourg hosts more than half of Europe's ELTIFs, with over 160 registered by April 2026.² That investor base comes with its own distribution, liquidity and reporting requirements.

Who should we approach?

Fewer investors, better chosen. Family offices, private banks, insurers, pension funds and fund-of-funds differ in ticket size, decision process and constraints. Approaching only those whose mandate fits gets further than a broad roadshow.

What do investors check first?

The team and its attributable track record, the manager's own commitment, fee and carry alignment, governance and key-person terms, and reporting quality.

What should be ready before launch?

A clear strategy and a realistic target size, a data room with attributable track record and references, fund documents checked against current market terms, an anchor or seed conversation under way, and a budget for eighteen months or more of fundraising.

How we raise capital →

How we help

Corvus Management advises sponsors and asset managers on fund structuring and capital raising. We test the strategy and terms against current investor expectations, prepare the materials and data room, identify the investors whose mandate, ticket size and horizon fit, and run the process through to closing. Regulated activities, such as the placement of fund interests, are carried out by regulated partner firms.

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