GPs Lean Into Growth Amid Fundraising Strain — Evening Brief – 07.01.26

Alternative investment managers are continuing to invest aggressively in growth, technology and talent despite a tougher fundraising environment, according to Dynamo Software’s fourth annual survey of global general partners.

The survey, conducted in March and April, found that fundraising remains the industry’s top challenge for a fourth consecutive year as limited partners become more selective with capital commitments. Seventy-one percent of respondents cited raising capital as their biggest obstacle, up sharply from 50% in 2025.

Yet the industry’s outlook remains optimistic.

Nearly 70% of private equity, hedge fund and venture capital firms surveyed expect fundraising activity to either remain stable or increase over the next 12 months, while 73% plan to launch a new investment fund during that period.

The findings, published in Dynamo’s latest Frontline Insight Report, suggest general partners are adapting to a more competitive market by expanding their product offerings and investing in new growth channels.

Direct investing emerged as one of the industry’s fastest-growing areas. More than half of respondents, 56%, expect direct investment allocations to increase, up from 51% a year earlier. Dynamo said the trend mirrors growing interest from institutional investors seeking more targeted exposure and greater control over investments.

Technology investment is also accelerating, with artificial intelligence emerging as the industry’s top strategic priority.

“Leveraging AI-powered tools to enhance decision-making” ranked ahead of portfolio management and investor reporting as the most important initiative for the coming year. Overall, 78% of firms expect to increase technology spending.

“At first glance, it may seem surprising that firms investing heavily in AI continue to hire,” said Hank Boughner, CEO of Dynamo Software. “But on closer inspection, it makes good sense for the alternatives industry.”

Indeed, more than half of firms surveyed plan to increase headcount, signaling that managers view technology and talent as complementary rather than competing investments.

For the second straight year, deal sourcing and relationship management ranked as the industry’s top technology use case, followed by fundraising and marketing automation. Data security and privacy remained among the top three priorities as firms seek to modernize operations while meeting increasingly complex investor expectations.