Meet the moment

Series: What LPs are looking for in 2025

Fundraising in 2025 is a fundamentally different game. Amid geopolitical instability, trade disruptions and increased scrutiny on fund structures, LPs are actively reallocating. The days of defaulting to large-cap US buyouts are over.

A changing focus

Moonfare’s 2025 survey shows LP preferences shifting clearly:

• Mid-market buyouts top the list at 51.2%
• Secondaries are increasingly favored at 45.8%
• Large-cap buyouts are at just 15.5%

The mid-market offers flexibility and faster exit timelines – qualities LPs now actively seek. Secondaries offer liquidity and vintage diversification, solving some of the bottlenecks discussed in our first post in this series.

Sector preferences are also evolving

Tech still leads (65.7%), but defense has jumped to 56.2% – driven by geopolitical instability and increased national security investment. In Q1 2025 alone, defense saw $4.3B in global private equity inflows.

Healthcare/biotech (47.3%) and infrastructure (24.4%) are also strong contenders. LPs are leaning into sectors with perceived resilience and policy tailwinds.

As a GP, if you’re investing in high-interest sectors, you need to articulate why your strategy fits the moment.

Fund structure matters more than ever

LPs are demanding structural flexibility. 56.6% would allocate more if better liquidity were available. They prefer:

• Shorter lock-up periods (23.2%)
• Secondaries (22%)
• Evergreen/semi-liquid funds (22%)

This doesn't mean you need to reinvent your fund model, but it does mean being prepared to answer questions about liquidity. Can your structure support interim distributions, secondary sales, or early exits? Can you build more optionality into your strategy without compromising return potential?

How GPs should respond

• Double down on mid-market. LPs see it as more nimble, less leveraged and with better exit optionality.
• Show thematic conviction. If you're focused on defense, tech or healthcare, lead with your unique insight.
• Rethink liquidity. Can your strategy incorporate optionality or participate in the secondaries ecosystem?
• Clarify structure. Walk LPs through the mechanics of your fund, including lock-up terms, exit windows and what flexibility you can offer.

Takeaway

Fundraising in 2025 is about showing LPs that your fund is purpose-built for the realities of today’s market. GPs who align with this new landscape – rather than try to work around it – will be the ones who close.