GPs Remain Confident on 2024 Fundraising: Dynamo
Dynamo Software, an alternative investments fintech company, recently conducted a survey that revealed GPs remain optimistic that LPs are moving forward with new commitments, particularly as the stock market continues to recover, providing comfort to the overall investment outlook.
The 2024 Dynamo Frontline Insight Report, which surveyed 100 global GPs and asset managers about their general view for the next 12 months, discovered that 70% of GPs are increasing their fundraising efforts, with 40% maintaining the same pace as before and 30% increasing it. Last year, 33% stated they found raising capital too difficult, and only 22% expect the same this year.
“Whether it’s in terms of new investments or potentially deploying or getting distributions through exits, it slowed down a bit for us and the broader market and I think that caused a lot of dry powder in the market,” said Hank Boughner, CEO of Dynamo Software during a webinar detailing the survey results.
Most survey respondents (62%) were in the U.S. and Canada, followed by Europe (23%) and Asia (11%). The remainder was divided among Australia, New Zealand and the Middle East. The investment strategies represented include private equity, hedge funds and venture capital.
According to the report, an increasing proportion of managers are considering expanding their credit and private lending offers. Last year, approximately 7% planned to include credit and debt strategies; now, more than 14% aim to do so. A larger proportion (7%) expressed interest in GP stakes offered, up from 0% last year.
The survey revealed that the challenges faced by GPs were consistent with past years. Fundraising, current market conditions, and transaction activity have emerged as the key barriers to growth.
As a technology vendor, Dynamo surveyed GPs to learn about the difficulties they want to solve with technology. Deal management and CRM took the top spot, while investor relations fell to second place, edging out portfolio monitoring evaluation.