Key considerations for Private Capital GPs and LPs

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Mar 20 2025

In early March, members of the Freshfields US Private Capital team attended the 2025 With Intelligence Women in Private Equity Summit in Arizona, where we hosted the Fundraising Forum: Insights on Negotiating Terms in 2025. The session explored key trends shaping the private equity landscape, including the evolving dynamics between GPs and LPs that are affecting how the industry approaches fundraising, liquidity and secondary transactions and GP stakes transactions. Below are seven key takeaways from our discussions.

Fundraising

GPs need to focus on what LPs’ mandates are for the year, including by way of allocation priorities and timing. Relatedly, the incentives a GP chooses to offer by way of economics, co-invests and other matters to encourage investment and closing are only good if the LP is in a position to take advantage of them.

Secondaries

Secondaries have been on the rise and will continue to be a prevalent portfolio management solution, both on the LP- and GP-led front. They also provide much-needed liquidity to LPs that helps bolster reallocation to the primaries market.
Not all portfolio companies, or portfolios, are good candidates for a continuation vehicle process. It is important to be thoughtful and work with advisors in this intermediated market.

GP Stakes

Investment management is an increasingly complicated and expensive market in which to enter or grow. GP stakes partners can offer a great seeding or acceleration opportunity for GPs, including offering access to a larger platform for distribution, back-office, talent augmentation, consulting or other capabilities.
Entering into a long-standing partnership with a GP staker thoughtfully requires extended relationship-building, with the goal of developing a partnership over time. Different partners suit different situations.

General

The contracts we draft and the processes we establish today live on for many years and sometimes cannot contemplate future market twists and turns (e.g. rise in secondaries; types of expenses around AI use; use of new and varied service providers and software). Talking to others on the market and in the private capital industry can help us all manage these shifts.
As this new administration unfolds, we should keep an eye out for regulatory changes that will affect our practice and the private capital industry, including those that relate to SEC oversight, retail access to funds, antitrust, ESG/DEI and other matters.

Authors

New York

Mar 20 2025

Fundraising

GPs need to focus on what LPs’ mandates are for the year, including by way of allocation priorities and timing. Relatedly, the incentives a GP chooses to offer by way of economics, co-invests and other matters to encourage investment and closing are only good if the LP is in a position to take advantage of them.

Secondaries

Secondaries have been on the rise and will continue to be a prevalent portfolio management solution, both on the LP- and GP-led front. They also provide much-needed liquidity to LPs that helps bolster reallocation to the primaries market.
Not all portfolio companies, or portfolios, are good candidates for a continuation vehicle process. It is important to be thoughtful and work with advisors in this intermediated market.

GP Stakes

Investment management is an increasingly complicated and expensive market in which to enter or grow. GP stakes partners can offer a great seeding or acceleration opportunity for GPs, including offering access to a larger platform for distribution, back-office, talent augmentation, consulting or other capabilities.
Entering into a long-standing partnership with a GP staker thoughtfully requires extended relationship-building, with the goal of developing a partnership over time. Different partners suit different situations.

General

The contracts we draft and the processes we establish today live on for many years and sometimes cannot contemplate future market twists and turns (e.g. rise in secondaries; types of expenses around AI use; use of new and varied service providers and software). Talking to others on the market and in the private capital industry can help us all manage these shifts.
As this new administration unfolds, we should keep an eye out for regulatory changes that will affect our practice and the private capital industry, including those that relate to SEC oversight, retail access to funds, antitrust, ESG/DEI and other matters.