U.S. Fund Managers Increasing Targets In 2024: Report

Fund managers are “hopeful, but slightly cautious” when it comes to fundraising in 2024, according to Passthrough, a provider of investor onboarding automation for fund managers and other fintechs, in its 2024 Fundraising Predictions Report.

The firm surveyed 104 U.S. fund managers, GPs, investor relations directors, CIOs, and CFOs.

Overall, 66% of respondents are planning to increase their target size, but 50% are planning to extend their timeline. In addition, over 77% of respondents predict there will be more new funds in the market in 2024 compared to 2023.

Moreover, 75% of respondents predict the current market conditions for fundraising will become more challenging in 2024. However, GPs believe that despite market conditions there is capital to be found, “it’s just going to take some time and tactics to find it,” Passthrough said.

Looking ahead to this year, 35% of respondents are planning to offer new strategies, including co-investments. Meanwhile, 43% of respondents are planning to increase retail investor participation.

In addition, 48% are looking to diversify their investor base by going international, with the UK being the top target at 46%. Finally, 48% of respondents predict investor demand for liquidity will be driven by economic uncertainties and market volatility.

“Given everything going on in the world, it’s not shocking to see the mixed market signals from our latest report,” says Tim Flannery, CEO & co-founder at Passthrough. “Fund managers are coming back to market because you can only sit on the sidelines for so long. 2024 still promises to be difficult, but managers are embracing and coming prepared.”

ESG remains top of mind for fund managers as well. Just over 41% of managers believe market competitiveness will be the primary driver for ESG integration. This is compared to the 30% who believe regulatory pressure will play a role in adoption, the report noted.