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Are you LP-ready?

  Nicola Nicholson, Programme Founder, Emergent / Head of Marketing, Gen II  ·  1 minute read

Series: What LPs are looking for in 2025

In a market with $1.2 trillion in buyout dry powder, LPs aren’t deploying blindly. They’re asking tougher operational questions, and many emerging managers are unprepared. Fundraising used to hinge on performance and storytelling. In 2025, it also depends on process, infrastructure and discipline.

What “operational readiness” means in 2025

PEI’s LPGP Dynamic report outlines the top non-performance due diligence concerns LPs are raising in 2025:

Cybersecurity – 47%

  • ISO 27001 certification or equivalent frameworks
  • Ongoing penetration testing and response plans
  • Documented vendor security evaluations

Cash management oversight – 46%

  • Use of a reputable fund administrator with independent cash control
  • Segregated accounts and treasury oversight processes
  • Clear reconciliation, approval workflows, and signatory controls

ESG credibility – 40%

  • Adoption of SFDR Article 8 or 9 standards (where applicable)
  • Third-party ESG assurance or audits
  • Alignment between ESG claims and actual financial risk management

Outsourcing quality – 35%

  • Clear documentation of roles, responsibilities, and KPIs for vendors
  • Evidence of vendor diligence, SLAs, and contingency plans

These represent core areas of risk and compliance that LPs now expect GPs to manage proactively. For emerging managers, they present both a challenge and an opportunity. Are you ready to tackle them?

What GPs should do now

  • Invest in the right partners early. Your operations should be institutional-grade from the beginning – not after your first close.
  • Treat documentation like marketing. LPs want to see process, oversight and scalability clearly laid out.
  • Conduct internal due diligence. Test your own systems before LPs do. Have answers to questions about cybersecurity, cash and compliance.

What today’s LP expectations really mean

LPs simply want to see that your infrastructure can support scale, respond to risk and operate with transparency.

This shift doesn’t just impact large firms. If anything, emerging managers are under even more scrutiny. Your ability to demonstrate operational readiness from Day One can make the difference. Think of it all as part of your pitch.

In a crowded fundraising landscape, GPs that show discipline and clarity in how they run their fund platforms will earn LP trust.

Takeaway

Your infrastructure is now part of your key story. LPs don’t just want strong returns – they want confidence that you can run a professional, risk-aware operation.