McGuireWoods welcomed more than 1,200 emerging managers and limited partners (LPs) to The Ritz‑Carlton Dallas for the annual Emerging Manager Conference — the cornerstone of the firm’s Emerging Manager Program and preeminent gathering of emerging managers and LPs who invest with them. Over two days, attendees rotated through over 5,000 formal speed‑networking meetings and attended five candid panel discussions moderated by partners from McGuireWoods’ Fund Formation & Investment Management Practice Group and Emerging Managers Industry Team. The message was clear: 2025 fundraising rewards differentiation, transparency and disciplined execution.
Read on to learn key takeaways.
Focus on Differentiation — and Prove It
Managers must articulate why their edge is durable and provide objective evidence. Panelists recommended general partners (GPs) preload Fund I with a warehoused deal, one or more pending transactions or, at minimum, a data set that demonstrates repeatable and unique sourcing. A concise statement of “where we play, how we win” matters more than pedigree or size. In a crowded middle market, a narrow thesis resonated far more than broad mandates.
Turn Every Pitch Into a Dialogue
LPs see dozens of decks each week, but they most often remember interactive conversations. Panelists advised GPs to cut PowerPoint clutter, open with the two‑minute “why us” summary, and invite questions on strategy, team and pipeline. One veteran allocator compared the best first meetings to a “teaching case” in which the GP walks LPs through a live or recent deal to illustrate the full playbook.
Build Relationships Long Before the Raise
Across panels, GPs and LPs described multiyear courtships that started with simple check‑ins or a shared diligence call. Sending quarterly letters, inviting prospects to annual meetings and offering micro‑co‑investments ($250,000-$1 million) allow LPs to observe culture and process without immediate commitment. “Surprise us with your candor, not with your private placement memorandum (PPM),” one university endowment director noted.
Create Momentum — Then Communicate Relentlessly
Momentum remains the GP’s best friend. Anchored first closes, realistic interim targets and disciplined timelines shorten the overall raise and let managers pivot back to value‑creation. Panelists cautioned that once the clock starts, communication gaps can kill interest. Monthly updates — even if nothing material has changed — keep pipeline deals, team additions and closings top‑of‑mind.
Choose Placement Agents With Extreme Care
A skilled agent does more than schedule meetings. The right partner workshops the deck, rehearses the story and calibrates the LP list to the thesis. The wrong agent burns cycles, sets unrealistic expectations and occasionally damages market perception. Managers were urged to interview references, demand transparency on fee splits and insist on a bespoke plan before signing.
Structure Creatively — but Keep Future Funds in View
Bridge funds, special purpose vehicles (SPVs), continuation vehicles and revenue‑share seed deals featured prominently. All can unlock capital, but the legal and economic terms must leave space for Funds II and III. Over‑dilutive revenue shares or evergreen fee holidays may have sounded attractive in the past, but several panelists described how those terms may block new LPs who balk at mis‑aligned upside or narrow governance.
Offer Co‑Invest Only When the Deal Fits the Thesis
LP appetite for co‑investment remains high, yet the bar is higher. Deals should fall squarely within stated size and sector bands. Stretching up solely to create allocation undermines credibility. Panelists recommended pre‑clearing co‑invest mechanics in the limited partnership agreement (LPA), maintaining pro‑rata rights for existing LPs and circulating a one‑page term sheet promptly after signing a letter of intent (LOI).
Assemble Complementary Partnerships
Whether a firm has two founders or five, complementary skills matter more than headcount. Investment judgement paired with operating depth and a CFO who can manage audits and data proved the most common winning mix. Clear decision rules and carry splits established early prevent morale‑sapping renegotiations mid‑fund.
Recognize LP Priorities Beyond Returns
Endowments, pensions and outsourced chief investment officers (OCIOs) reiterated that risk‑adjusted return remains the North Star, yet data‑backed diversity, cybersecurity hygiene and carbon disclosure may influence re‑up decisions from some LPs. Firms that gather metrics early — even simple dashboards on team composition and Scope 1 emissions — find the conversation smoother when the investment committee weighs two otherwise comparable funds.
Summarizing the 2025 Fundraising Environment: What’s New, What’s Familiar
- Higher Bar, Not Closed Door. Slower exits still leave many LPs over‑allocated, but they have and will fund tightly focused first‑time managers who show evidence, not just enthusiasm.
- Evidence Over Excitement. Live KPIs, warehoused assets and interim portfolio reviews outweigh pedigrees, forecasts and glossy decks.
- Relationships Drive Allocation. LPs back GPs that they have watched operate — often through independent‑sponsor deals or small co‑invest trials.
- Alignment Is Scrutinized. Fee waivers, revenue shares and seed terms that feel cheap today can handcuff Fund III. Balanced structures prevail.
About the Authors
McGuireWoods partner Jon Finger leads the firm’s private equity industry team and leads the Emerging Manager Program. Robert Fox is managing director of private equity at McGuireWoods. The authors thank partners and panel moderators Kevin Boardman, William Herrfeldt, Richard Starling and Abdul-Rahman Lediju for their contributions.