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Given the continued flow of capital to the largest fund managers, many smaller firms are wondering how to remain attractive to investors.
Conversations with private equity firms, placement agents and fund formation lawyers reveal limited partners to be more flexible and understanding than one might think.
One thing is certain: A manager’s ability to exit portfolio companies and deliver distributions has moved to the center of LP due diligence. And the scrutiny goes beyond real cash distributions or realization metrics—there is a new level of rigor in how investors are underwriting fund managers.
I'm Madeline Shi, and this is The Weekend Pitch. You can reach me at madeline.shi@pitchbook.com or on LinkedIn.
LPs have begun probing specific transactions, which was unusual in prior cycles, according to several industry participants. Investors are asking about the entry multiple that a GP paid for a deal, how the exit was achieved and what led to the return. Investors are also pulling individual company marks and performance data to benchmark against assets held across other PE funds in their portfolios.
"People are going more line by line now," said Steve Zaorski, a partner at Ropes & Gray who leads private fund formation for PE sponsors, adding that headline fund performance is less important than it used to be. |
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| Why switching fund administrators feels hard and why it does not have to be |
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Most fund managers stick with administrators despite poor outcomes because switching often feels worse than the problem. Data remains trapped in disconnected systems, key processes rely on individuals rather than platforms, and the right time to move never quite comes. Add transition fatigue, and even necessary change gets delayed.
Formidium was built to change that dynamic.
With integrated technology, guided onboarding, and AI embedded into daily workflows, Formidium makes transitions structured, transparent, and far less disruptive. What once required months of painful effort is now a controlled, manageable process. As a result, the switching costs that kept managers stuck are steadily shrinking.
See how Formidium is redefining fund administration transitions. |
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The UK is coming back into the VC frame, with £7.2 billion invested across 586 deals in Q1. The last time VC deal value was this high in the UK, £7.5 billion was invested across one quarter. During which quarter did UK startups raise that £7.5 billion?
A) Q2 2021
B) Q4 2021
C) Q2 2022
D) Q4 2022
Find your answer at the bottom of The Weekend Pitch! |
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A selection from our most-read articles of the past few days.
- The circular logic powering OpenAI's infrastructure dealmaking is starting to look less like a flywheel and more like a liability, with ripple effects across the AI neocloud venture ecosystem. Read on
- Lincoln International could become the first boutique investment bank to go public in the US in five years amid a buoyant earnings season for the sector. Read more
- Bill Ackman's new $5 billion investment vehicle dropped 18.2% in its NYSE debut, highlighting a common mismatch between the asset value of such vehicles and their market price. Find out more
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“No one is directly saying, ‘We are building AI physicians.' They are building clinical-decision support to assist physicians. At some point, you can flip a switch and the physician oversight is left behind.”
—Brian Wright, PitchBook’s director of healthcare research, speaking about AI adoption in healthcare. "Care deserts" across America may be a catalyst for loosening regulations to enable the implementation of AI tools that provide essential health services. Read more about the potential removal of barriers for medical AI startups. |
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Answer: C
The last time UK startups collected more than £7 billion in a quarter was in Q2 2022, where VC deal value totaled £7.5 billion across 1,063 deals. In Q1 2026, UK startups nearly reached this level, the highest in almost four years. Read more about the AI innovation and mega-deals pushing British deal value up. |
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This edition of The Weekend Pitch was written by Madeline Shi and Nadine Manske. It was edited by Rod James and Nadine Manske.
Were you forwarded The Weekend Pitch? Sign up at pitchbook.com/subscribe. |
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