Private equity managers are adapting their fundraising strategies to a more disciplined market where clarity, alignment, and operational storytelling matter as much as returns. Limited partners are pressing for deeper transparency, sharper differentiation, and greater evidence of execution strength. These insights stem from the Private Equity Fundraising breakout session at Invest Canada ’25, presented by BDO Canada LLP.
The private equity breakout session at Invest Canada ’25, presented by BDO Canada LLP, highlighted how general partners are refining their approach in response to a changing capital environment. Fundraising timelines may be extending, but more notably, LPs are shifting how they evaluate strategies, governance, and alignment.
Panelists shared that LPs are placing greater weight on a manager’s ability to clearly articulate the “why you” as well as the “why now.” Differentiation is no longer a positioning exercise; it is a baseline requirement. GPs are expected to demonstrate how their sourcing advantages or operational strengths map directly to their investment thesis, with clear evidence that they can execute in today’s market.
This has also reshaped negotiation dynamics. LPs are stepping forward with more pointed requests on deal terms, including recycling provisions, co-investment structures, and governance rights. Panelists emphasized that sponsors should prepare for deeper diligence and an open posture toward negotiation. Investors are looking for greater transparency on how portfolios are built and how value is ultimately realized.
Performance still matters, but operational storytelling is becoming just as critical. LPs are digging deeper into what drives outcomes across the portfolio. They are evaluating team development, post-close engagement, and the consistency of value creation across assets. A fund’s ability to speak clearly to these elements may become the deciding factor when investors weigh their next commitment.
The conversation turned to mid-market GPs, who often sit in a unique position. They are beyond emerging status, but may not benefit from established brand momentum. Panelists advised these firms to focus on refining how they communicate their sector strength, speed to execution, and niche advantages. Clarity and conviction in strategy are more valuable than size in this segment of the market.
One common misstep, according to panelists, is holding firm to legacy fundraising targets without adapting to current market signals. Track record alone no longer guarantees success. LPs are rewarding realism, strong communication, and thoughtful pacing. Misalignment between a manager’s expectations and market conditions can slow momentum and erode trust.
The group also discussed continuation funds and alternative liquidity options. These tools can serve important purposes, but only when used with alignment and transparency. Even well-structured proposals may be declined if LPs detect signs of imbalance. Early engagement with anchor LPs and advisory committees is essential to ensure that structures meet investor expectations from the outset.
Throughout the discussion, relationship management emerged as a defining theme. GPs that maintain regular contact, even when performance is under pressure, tend to maintain stronger investor confidence. One panelist noted that consistent outbound communication, regardless of the news, was key to preserving trust and pace through a difficult fundraising period.
Another shared that the fundraising process is not simply a capital exercise, but also a chance to reinforce values, reset expectations, and align with investors around the path forward. Whether it’s a re-up or a first-time close, GPs have an opportunity to set the tone for the next chapter of the relationship.
As the session concluded, the message was forward-looking. LPs are moving more selectively and taking a more hands-on approach to evaluation, but there is room for managers to meet these expectations. By leaning into clarity, operational readiness, and early alignment, GPs can position themselves to move efficiently and confidently through today’s environment.
Since 1979, Invest Canada has been where Canada’s private capital community comes together to build relationships, close deals, and share real-world experience. It’s the definitive forum for GPs and LPs to connect, collaborate, and uncover new opportunities. Learn more at conference.cvca.ca.
