The firm recently welcomed nearly 1,000 attendees to the Fourth Annual McGuireWoods Emerging Manager Conference — Buyouts, bringing together emerging managers and limited partners for two days of networking and candid discussions on the evolving emerging manager landscape. Attendees participated in more than 6,100 formal speed-networking meetings and heard from leading industry voices on the realities shaping today’s fundraising and investment environment.
Across the conference, several consistent themes emerged: Fundraising cycles are longer and more relationship-driven; LPs deploy capital more selectively and underwrite managers with increased discipline; and success is increasingly tied to demonstrable execution, transparent communication and long-term relationship management. Discussions also highlighted the growing importance of institutional infrastructure, operational value creation and strategic alignment as managers look to build durable platforms beyond Fund I.
The programming delivered actionable insights across fundraising, LP engagement, portfolio value creation, organizational development and emerging investment opportunities. Read on for key takeaways on navigating today’s increasingly competitive market.
State of the Private Equity Market
Participants in today’s private equity market must navigate a more disciplined environment, in which capital remains available but is deployed more selectively. Distributions to paid-in capital have slowed meaningfully, driven by extended hold periods. There is a large backlog of unrealized portfolio companies, reflecting a softer exit environment. This dynamic drives a greater focus on fundamentals, execution and long-term value creation.
This shift has materially reset fundraising expectations. Many first-time funds now take up to 24 months to raise, requiring longer planning horizons and sustained, relationship-driven engagement. At the same time, underwriting standards have tightened. While team and track record remain foundational, they are increasingly evaluated alongside clearly articulated strategies, demonstrated execution and repeatable value creation frameworks.
Anchor and seeded portfolios play an increasingly prominent role in accelerating firm formation, providing early momentum but introducing long-term economic considerations that must be carefully managed. In this environment, outperformance is increasingly driven by the accumulation of “micro edges” across sourcing, structuring, growth and exit execution rather than any single factor driving success.
Operational value creation has also become central to the investment thesis. While multiple expansion and leverage contributed heavily to returns over the past decade, investment managers are now under more pressure to focus on execution-driven outcomes supported by concrete playbooks and case studies.
Taken together, the market for emerging managers is more selective and more execution-driven. Capital remains readily available, but it is concentrated behind managers who can demonstrate discipline, differentiation and tangible proof of value creation in a constrained liquidity environment.
Secrets to Success as Fund I
Raising a first-time fund is inherently a relationship-driven process, in which early engagement does not immediately translate into commitments, and patience is a virtue. The path from getting a first meeting with a prospective investor to receiving a fund commitment often spans months to years, reinforcing the importance of early engagement and continued relationship building with potential investors. In this context, co-investment has emerged as one of the most effective tools for building conviction, allowing investors to evaluate managers through real-time underwriting and execution rather than static materials alone.
Anchor arrangements are increasingly central to early fund formation, often serving as the catalyst that gets a first-time fund off the ground. They can provide immediate validation and accelerate momentum with other investors. With that in mind, it’s helpful to remember that these relationships warrant a high level of continued focus, given their priority, connection to GP economics and long-term impact on the firm’s structure and trajectory.
Track record remains central to underwriting, with an increased focus on validation rather than presentation alone. Investors rely heavily on third-party references to confirm experience and consistency. Team composition is equally important, with a shared working history remaining a strong indicator of future success, although it is not sufficient on its own without clear evidence of how the team operated and created value together historically.
Execution in the early stages of a fund is equally important. The first few deals carry outsized weight in how a manager is perceived and how the fund performs, so staying disciplined and aligned with the stated strategy is key. It can be tempting to stretch the strategy to move faster on fundraising, but that often creates credibility issues that undermine confidence with LPs in the future. Equally, if not more important is transparency and communication with existing investors, particularly when the news is bad. Investors do not like to be surprised, caught off guard or believe that a sponsor is hiding material information from them. Sponsors can overcome negative events by being forthright about what happened and their plans to address the issues.
In the current fundraising environment, in which some LPs prioritize re-ups and known relationships, first-time managers compete for a limited pool of attention and allocation. Breaking through requires more than a compelling story. It requires proof of execution, disciplined strategy and consistent engagement over time. Managers who can demonstrate how they invest — not just what they invest in — and who build conviction through real interactions such as co-investment, are best positioned to convert early interest into commitments and establish a foundation for future funds.
Relationship Building from Initial Fundraise Through Re-Ups
Fundraising is often driven by relationships, but what frequently differentiates managers in today’s environment is the work that goes in after the first commitment. Managers who stay engaged throughout the life of the fund rather than concentrating on outreach when they are in-market are better positioned to build trust, demonstrate execution and ultimately secure support for fund II and beyond.
Consistency of approach remains one of the most important drivers of trust. Investors place significant weight on whether managers do what they say they will do, evaluating not only outcomes, but also the underlying decision-making process. This includes clarity of thought, rationale for leaving prior platforms and a demonstrated willingness to commit to a strategy over time. In practice, this reinforces earlier themes around disciplined execution and alignment with stated strategy, particularly as early decisions are closely scrutinized and carried forward into future fundraising cycles.
Co-investment, and continued “looks” at opportunities, is another avenue managers can leverage throughout the life of a fund to maintain relationships and continue to build trust. Working alongside investors on live deals, including those that do not ultimately close, provides a direct view into sourcing, underwriting and risk assessment. These interactions create a level of transparency and alignment that cannot be replicated through materials or reporting alone and often serve as the foundation for longer-term partnerships.
Ongoing communication also plays a critical role in strengthening relationships. Engagement that extends beyond standard quarterly reporting, including timely updates, thoughtful insights and early transparency around challenges helps build trust and reinforce credibility over time. Managers are increasingly using more proactive ways to demonstrate depth in their focus areas, including publishing targeted thought pieces, sharing perspectives on market dynamics and providing actionable insights that are relevant to an LP’s broader portfolio. Serving as a reference point for LPs on other deals – whether as a co-investor, sounding board or source of diligence insight – further reinforces expertise and keeps managers engaged in the investment dialogue outside of their own fundraising. Over time, this level of engagement helps position managers as trusted partners rather than transactional capital partners and often leads to deeper relationships and stronger advocacy from early investors.
In a more competitive and visibility-driven fundraising environment, managers increasingly focus on creating tangible proof points that differentiate their platform and accelerate investor conviction. Strategic partnerships, warehousing deals and seeded portfolios provide real-time evidence of execution and help translate interest into commitments, particularly in a market in which LPs often seek greater visibility before allocating capital. These tools build on earlier themes around demonstrating how managers invest, not just what they invest in, and can play an important role in breaking through fundraising noise.
As fundraising cycles extend and some LPs concentrate capital among known relationships, the path to re-ups after funds I-III is increasingly shaped by the strength of early partnerships. Managers who invest in relationships early, communicate consistently and build conviction through shared execution are best positioned to carry that momentum forward, with fund II often representing a continuation of relationships established well before the first close.
Building an Enduring Firm From First Fund to Institutional Platform
Building an enduring private equity platform requires managers to think institutionally far earlier than many expect. As firms move beyond fund I, LPs increasingly demand a more professional organizational infrastructure, governance, talent retention and long-term decision-making architecture. The transition from a successful first fund to a durable institutional platform introduces a new set of priorities centered around scalability, alignment and long-term organizational stability.
Honesty and transparency continue to be the bedrock of LP relationships, particularly at the investment committee level. Managers increasingly expect to present team contributions, attribution and portfolio performance with precision, and inconsistencies uncovered during diligence can quickly undermine trust. As underwriting standards continue to rise, LPs place greater emphasis not only on performance, but also on how managers communicate, govern and institutionalize the business over time.
Fund size discipline has also become increasingly important. While scaling can create momentum, raising a fund size too aggressively can strain deployment pace and infrastructure (or lead to strategy drift) and put pressure on firm culture before the organization is ready to support it. Deliberate growth, with alignment among strategy (including market opportunity), staffing and capital base, continues to be viewed more favorably than scaling for scale’s sake.
Operational infrastructure is another defining component of long-term success. The CFO role in particular has become one of the most critical early institutional hires. Beyond reporting and compliance, strong financial leadership helps the organization professionalize operations and digest and respond to LP expectations and allows investment professionals to remain focused on sourcing and execution. As firms mature, institutional quality infrastructure increasingly becomes part of the underwriting process itself, and arguments that it is “in process” become less compelling.
Alignment within the firm is equally important. Compensation structure is viewed not only as an economic consideration, but as a key driver of retention, culture and long-term platform stability. Carry allocation structures are often most effective when they are communicated transparently and designed to scale progressively across the broader organization, including non-investment professionals when appropriate. More concentrated founder-centric models can create retention challenges and organizational instability, particularly when economics and decision-making remain tightly held for too long — one of the key drivers in the growth of new emerging managers over the past five years. Establishing pathways for broader participation in carry and management company ownership earlier in the firm’s lifecycle can help reinforce alignment, support succession planning and position the platform for long-term continuity.
Ultimately, building an enduring platform is not defined by how quickly a firm can scale, but by how effectively it institutionalizes over time. In an environment in which LPs underwrite organizations as much as investment strategies, the firms best positioned for long-term success are those that grow deliberately, invest early in infrastructure and talent, maintain cultural cohesion, and build alignment across LP relationships and internal team dynamics.
Path Forward
The themes emerging across the panels and meetings reflected a market in which investors place greater emphasis on execution, institutional discipline and long-term alignment when they evaluate emerging managers. These conversations remain central to the mission of the McGuireWoods Emerging Manager Program, which continues to support emerging managers through connectivity, thought leadership and curated engagement with institutional capital providers.
Looking ahead:
- The upcoming McGuireWoods Emerging Manager Conference — Beyond Buyouts on Sept. 1–2, 2026, in Dallas, brings together emerging managers and LPs across growth equity, private credit, venture capital, real assets, public equities and other non-buyout strategies for a dedicated multi-strategy forum. Registration is now open.
- McGuireWoods is also pleased to announce the dates for the McGuireWoods Emerging Manager — Buyouts Conference on April 6-7, 2027, in Dallas, bringing together emerging managers and LPs across buyout strategies.
- McGuireWoods and Taproot Capital launched a first-of-its-kind survey focused on how LP capital is moving in today’s evolving fundraising environment. The resulting 2026 Emerging Manager Capital Formation Report will provide benchmark insights on fundraising trends, LP demand and opportunities across the buyout landscape. Participate and receive the published results by completing the Survey Interest Form.