The GP response to changing LP allocation strategies
As LPs adopt more sophisticated allocation models and heightened expectations for transparency, technology, and diversification, GPs must rethink how they operate, engage investors, and deliver performance.
In Part 2 of this analysis, Alter Domus examines how leading managers are adapting their infrastructure, liquidity approach, and asset expertise to meet this new era of institutional expectations.
A shifting LP landscape demands an evolved GP response
A challenging macroeconomic backdrop and a more sophisticated approach to private-markets portfolio construction are transforming how LPs structure their investments. As outlined in Part 1, LPs are now operating with greater precision — seeking diversification, liquidity, and data-driven performance visibility.
GPs must now match this sophistication with operational precision, technology-driven efficiency, and a sharper investor narrative.
LPs are more demanding when it comes to investor reporting and GP operational capability, and more precise about the geographic and risk-reward exposure of the funds and investment strategies they back.
To remain relevant, GPs can no longer rely solely on track record and relationships. They must demonstrate infrastructure maturity, institutional-grade processes, and the ability to anticipate LP needs before they are voiced.
As the underlying reasons driving LP allocation decisions continue to evolve, GPs must show they can adapt at the same pace — not by simply adding products, but by redesigning how they create, deliver, and communicate value.
The GP response: turning challenges into competitive advantage
At Alter Domus we have identified four key areas for GPs to address in order to remain in tune with evolving LP expectations:
Level up technology
Implementing integrated, best-in-class technology infrastructure has become the bedrock for any GP aiming to meet the operational and reporting sophistication now required by LPs.
Technology-enabled managers can transform operational agility — automating core functions, enhancing data transparency, and freeing teams to focus on performance rather than process.
Beyond efficiency, technology has become a signal of credibility. LPs now associate digital maturity with governance strength and risk control — both essential to institutional trust.
Develop global reach
The LP base is becoming increasingly diverse and globally distributed. Investors are seeking differentiated risk-return exposures across geographies — from North America to Europe and Asia — creating new demands on GPs’ operational infrastructure.
For GPs, global operational reach is no longer optional — it is a prerequisite for credibility. Managers that can provide consistent reporting, compliance, and investor servicing standards across jurisdictions will differentiate themselves in an increasingly competitive fundraising market.
Building up global investor servicing in-house is operationally challenging and capital intensive. GPs who can provide a global network for fund servicing capability will be at a distinct advantage in a competitive fundraising market.
Facilitate liquidity
A manager’s ability to proactively manage liquidity has become a defining factor in securing investor confidence and capital commitments.
As exit volumes slow, distributions to LPs have fallen, leaving investors cash-constrained and selective.
With distributed-to-paid-in (DPI) ratios now central to allocation strategies, GPs that can dilute their demands for liquidity from investors, and expedite distributions through alternative channels, will stand out from the crowd. The ability to maximize the use of fund finance and GP-led secondaries markets will be key tools for achieving these strategic objectives.
Fund finance can be used in myriad ways to optimize liquidity for managers and LPs. NAV lines can be used to speed up distributions but also serve a more prosaic function of simply reducing the requirement to make capital calls or seek fund extensions to secure additional support for portfolio companies. Fund finance facilities can also be used to finance GP commitments at time when LPs are expecting larger commitments and manager cash flows have been constrained because of prolonged hold periods.
Harness asset-specific know-how
Investors are taking a more targeted approach to constructing their private markets portfolios, which increasingly contain a mix of private markets strategies.
Some GPs have already successfully branched out into adjacent strategies like private credit and secondaries, and there remains a window of opportunity for GPs to expand their franchises by launching new strategies that align with LPs’ growing appetite for diversification.
However, adding a new strategy introduces not only additional operational demands but also the need for asset-specific expertise. A private credit fund, for example, will require systems that can calculate and collect interest payments and track covenant tests and loan amortization. Infrastructure strategies require the capacity to forecast and manage long-term capital calls and complex pricing arrangements.
Ultimately, the GPs best positioned for success will be those able to scale their platforms efficiently while maintaining the precision, transparency, and discipline that LPs now expect across every asset class.
How Alter Domus enables the next generation of GPs
The evolution of LP expectations — from technology and transparency to liquidity and diversification — is forcing GPs to elevate every part of their operating model. Alter Domus partners with managers to make that transition achievable.
Through our global platform of more than 6,000 professionals across 23 jurisdictions and the administration of 36,000 client structures, we provide the infrastructure, data precision, and multi-asset servicing expertise that help managers operate at institutional scale.
Whether upgrading technology stacks (such as Allvue, eFront, Private Capital Suite or Yardi), streamlining reporting workflows, or managing NAV and fund-finance structures, Alter Domus helps GPs build operational resilience and investor trust.
Our regulatory fluency, local presence, and deep understanding of LP priorities allow us to support clients as they expand into new geographies, launch diversified strategies, and strengthen liquidity management — all while reducing the cost and complexity of doing so in-house.
By embedding scalable processes and data discipline into our clients’ operations, Alter Domus enables GPs to focus on what matters most: delivering performance, building durable LP relationships, and positioning their franchises for long-term success.
What this means for GPs
The changing drivers of LP allocation strategies present an opportunity for GPs. Managers who understand shifting LP priorities and respond proactively can gain an edge over peers who are slower to adjust.
However, success will depend on more than investment performance — it will require a robust operational backbone that can sustain the growing complexity of global portfolios and multi-asset strategies.
Alter Domus’ global footprint, technical expertise, and asset-specific servicing capability position us to help GPs meet this higher standard — turning operational excellence into a genuine competitive advantage.
Conclusion
Shifting LP allocation priorities are raising the bar for how GPs operate, not just how they invest. As portfolios become more complex and capital more selective, operational capability has become central to credibility, scalability, and fundraising success. GPs that align technology, liquidity management, global reach, and asset-specific expertise will be best positioned to meet evolving LP expectations and compete in the next phase of private markets.
As 2025 draws to a close, private markets continue to reflect a year of shifting macro conditions, uneven activity across asset classes, and a stronger focus on liquidity and portfolio management. This review outlines the key trends that shaped private equity, infrastructure, real estate, and private debt over the past 12 months.
Private equity dealmakers endured a volatile year, as tariff changes put the brakes on an encouraging start to 2025.
With hopes that 2025 would herald an M&A revival put on ice, pressure on GPs to clear portfolio backlogs and make realizations remained unrelenting.
Continuation vehicle volumes continued to climb as managers made full use of the alternative exits routes available to them.
Fundraising remained challenging, as LPs held off from backing new funds liquidity and program cash flows improved.
Positive sentiment did begin to build in the second half of the year, with banner deals in Q3 2025 boosting year-on-year deal value comparisons.
Elliott Brown
Global Head of Private Equity
A Year Defined by Resetting Expectations
The private equity market entered 2025 with optimism that early signs of deal momentum, stabilizing valuations, and modest improvements in liquidity would translate into a sustained recovery. But as the year unfolded, shifting macro conditions, uneven policy signals, and persistent portfolio pressures forced managers to recalibrate those expectations. While pockets of activity strengthened − particularly in later quarters − the broader environment remained characterized by caution, selective dealmaking, and a continued focus on managing through legacy backlogs. This backdrop frames the dynamics that shaped GP sentiment and market behavior across the remainder of the year.
A Slower Than Expected Deal Recovery
GPs’ hopes that 2025 would finally be the year that private equity M&A activity rallied, never quite materialized, as shifts in US trade policy and volatile stock markets put the deal recovery on hold.
Despite the DOW reaching all time highs, the last 12 months have not been easy for private equity managers, who started 2025 with the expectation that flattening inflation and interest rate cuts in key markets would signal a turn in deal activity figures following a 36-month period of declining buyout transaction flows.
US tariff announcements in April, and the subsequent market dislocation, dashed any hopes of a deal revival in 2025, but in the final two quarters of the year, once dealmakers had assessed the impact of tariff shifts on earnings and portfolio companies, buyout activity did show signs of improvement.
Global buyout deal value for Q3 2025 hit US$377.34 billion, according to Dealogic figures analyzed by law firm White & Case – the best quarterly figures recorded since the market peak of 2021 and 59 percent above Q2 2025 totals. This lifted the buyout deal value for the first nine months of 2025 to US$911.04 billion, bringing it in line with full-year figures for 2024 and putting the buyout market on track to exceed US$1 trillion in annual deal value for the first time since 2022.
Landmark deals – most notably the $55 billion take-private of video game developer Electronic Arts in the biggest leveraged buyout in history – also pointed to an improving backdrop for buyout deals.
After the initial tariff announcement shock, dealmakers gradually returned to business as the global economy rode out tariff disruption and interest rate cuts in the US, UK and Europe filtered through capital markets and brought down debt costs, facilitating more affordable deal financing.
Fundraising lagged deal rebound
The uptick in exit activity, while encouraging, was not large enough to put a meaningful dent in the backlog of unsold assets that had built up since 2022 and constrained the ability of managers to make distributions to their LPs.
According to PwC, the private equity industry still held an estimated US$1 trillion of unrealized assets halfway through 2025. Bain & Co.’s analysis, meanwhile, highlighted that while current exit volumes were broadly in line with 2019 levels, buyout managers were holding twice as many assets in their portfolios now as they were then.
With limited cash returns coming back to them, LPs had limited wiggle room to make commitments to new funds.
Fundraising through the first three quarters of 2025 fell to US$569.5 billion, according to PEIfigures – the lowest fundraising total for a Q1-Q3 period in five years and around 22% down on the fundraising for the corresponding period in 2024.
GPs adapted to clogged exit channels by using alternative methods to unlock liquidity. At the beginning of 2025, Bain’s analysis showed that nearly one in every three portfolio companies in buyout portfolios (30%) had already undergone some form of liquidity event, ranging from minority stake sales and dividend recaps to NAV financings and continuation vehicle (CV) deals.
The continuation vehicle (CV) structure, in particular proved a popular option for expediting liquidity, with figures from Jefferies showing that CV deals accounted for almost a fifth (19%) of private equity exits through the first half of 2025.
The CV structure proved to be flexible through the course of the year, with GPs not only making us of single-asset CV liquidity at relatively attractive valuations (90% of single asset CVs priced above 90% of NAV, according to Jefferies) but also constructing multi-asset CVs to provide investors with much wider and deeper liquidity optionality.
The rise of non-institutional capital
The challenging fundraising market also served to strengthen the tailwinds behind the rise of private wealth investment into private equity.
The constraints in the institutional fundraising market obliged managers to broaden their investor base and innovate to unlock new pools of investors – most notably in the non-institutional space.
This drove a significant increase in the formation of evergreen fund structures (including interval funds and semi-liquid funds, among others), which were launched to facilitate more flows from private wealth into private equity strategies.
Analysis from HSBC Asset Management found that the net assets for the largest 16 private equity-focused evergreen funds registered with the US Securities and Exchange Commission (SEC) increased more than sixfold between 2021 and 2025, from US$10 billion to US$61 billion. The increase between 2024 and 2025 alone was 68%, reflecting the rapid growth of the non-institutional wealth channel through the year.
Retooling the private equity production line
For private equity managers, grasping the CV and private wealth opportunities not only necessitated a shift in investment and fundraising strategy, but also a significant operational overhaul.
As CVs and private wealth grew in 2025, managers encountered added layers of complexity in their operational model.
In the CV context, for example, asset pricing and reporting transparency, not to mention the capacity to support additional fund structures, demanded enhanced reporting and back-office capability. GPs also had to manage LP wariness of CV structures when they were in an incumbent investor position, particularly in multi-asset deals where portfolio companies included in the package were valued as a group rather than individually. Managers had to respond by producing granular pricing detail, as well as providing comprehensive reporting for the CV structures on their books.
GPs who dipped their toes into the non-institutional fundraising market, meanwhile, found that they had to ramp up their investor relations content output to reach a much broader, more disparate non-institutional investor base, often through distribution partners.
GPs also had to scale up back-office capability to service the preferred fund structures that non-institutional investors sought out when making allocations to private equity. New requirements included publishing monthly NAV figures and managing liquidity sleeves to ensure that vehicles could meet redemptions.
In addition, managers had to step up as LPs undertook detailed reviews of their fund exposures through the cycle of market dislocation – raising the bar on GP reporting.
From back office to front office, 2025 proved a challenging year for private equity firms − one that GPs nonetheless managed to navigate and adapt to.
Conclusion
Taken together, 2025 was a demanding but defining year for private equity. Managers contended with volatile markets, tighter operational and reporting requirements, and shifting investor dynamics, yet continued to broaden liquidity routes and refine their models to manage complexity. The year’s developments ultimately underscored the sector’s ability to adapt under sustained pressure.
Private Debt: 2025 Year in Review
Private Debt highlights from 2025
Private debt posted good returns for investors and enjoyed strong fundraising support in 2025.
Patchy M&A markets, however, limited deployment opportunities and increased competition for deals.
Private debt managers reduced margins and eased lending terms in the race to win financing mandates.
The formation of private credit continuation vehicles and private credit CLOs climbed in 2025, reflecting the asset class’s sophistication and maturity.
Jessica Mead
Global Head of Private Debt
A Year of Strength and Structural Change
Private debt delivered another strong year in 2025, buoyed by resilient performance, healthy investor demand, and the asset class continued appeal as a flexible source of capital. While macro volatility and tariff-related market dislocations influenced deployment conditions, private debt managers benefited from fundraising momentum and borrowers’ growing preference for speed, certainty, and tailored structuring.
At the same time, intensifying competition, evolving loan features, and new fund architectures signaled a sector continuing to mature and expand its role within private markets.
Performance, Fundraising, and Market Dynamics
Strong investor returns and steady fundraising support underpinned private debt’s solid performance in 2025. The asset class delivered exceptional risk-adjusted returns for LPs and continued its run of outperforming leveraged loan, high yield bond, and investment grade debt markets.
At a time when fundraising in other private-markets asset classes stalled and sputtered, fundraising for private debt in first nine months of 2025 reached US$252.7 billion – a record high for any Q1-Q3 period – as investors recognized private debt’s exceptional performance.
Competition Intensifies
Private debt’s unique selling points – speed and certainty of execution, no requirement for borrowers to obtain credit ratings, and flexible structuring – proved particularly relevant for borrowers in the first half of the year.
Tariff tumult saw public debt markets all but shutter in Q2 2025, with figures from White & Case and Debtwire recording a 16% fall in US and European syndicated loan and high yield bond issuance between the first and second quarters of 2025, opening the way for private debt players to fill the void.
Through the second half of the year, however, as the tariff fallout settled, syndicated loan markets reopened and rallied strongly to present stiff competition for private debt players in market still characterized by limited deal financing transaction flow.
According to Bloomberg, Wall Street banks had built up a pipeline of more than US$20 billion of M&A debt financing heading into the final quarter of 2025, winning mandates off private credit players by pricing debt at very low margins. Private credit players also faced pressure to defend existing loan books, as the low pricing offered by leveraged loan markets lured private credit borrowers with the opportunity to refinance debt at cheaper rates.
Private debt players had to respond by squeezing margins and upping leverage. Figures from Deloitte show that the margins on most private credit loan issuance dropped below five percent in 2025, while margins greater than six percent became a rarity. Leverage multiples increased during the same period, with around one in two new deals leveraged at more than 4x. There was a sharp spike in the volume of private credit deals levered at 5x or more.
Private debt funds also had to offer other bells and whistles to stand out from the crowd. Payment-in-kind (PIK) features, which allow borrowers to add interest payments to the principal balance of a loan rather than paying in cash, for example, became an increasingly common feature in private debt structures.
Research from investment bank Configure Partners showed that the inclusion of PIK features in terms when private debt loans were issued increased from 14.8 percent of loans in Q2 2025 to 22.2 percent in Q3 2025. The margins on these PIK facilities also compressed in 2025, as lenders narrowed pricing to win transactions.
Ratings agency Moody’s, meanwhile, noted that covenant-lite structures, historically only a feature of syndicated loan issuance, had become more common in the private credit space.
Dealing with Defaults
Private debt players also had to contend with growing concerns around default risk after the headline-grabbing defaults of auto-sector lender Tricolor and car parts supplier First Brands, where private credit lenders had exposure. Following the defaults, some industry executives expressed concerns that more hidden pockets of distress in private credit could emerge in the coming months, leading to potential losses for managers and investors.
Private credit was singled out for scrutiny following these defaults, even though BSL markets and banks carried exposure to the same borrowers, Indeed, private credit portfolios actually held up well in 2025, with KBRA DLD Default Research forecasting a direct lending default rate for 2025 of just 1.5 percent – lower than syndicated loan and high yield bond markets.
Nevertheless, covenant breaches did increase through the year, and even though breaches remained below longer-term averages, managers did have to invest more time and resources into managing portfolio credits in these situations.
A New Era of Operational Sophistication
In addition to building up their benches of workout and restructuring expertise, private debt players also had to upgrade their operating models as they followed private equity’s example and adopted new fund and distribution structures.
During the last year continuation vehicle (CV) structures became more prevalent in private credit, as private credit managers looked to extend hold periods for portfolio credits that hadn’t been able to exit to original timelines and required refinancings, term amendments and maturity extensions.
In workout situations extended hold periods were also required, although private credit funds also used CV deals to parcel up existing loan portfolios and sell to secondaries investors as a way to expedite payouts to existing investors.
The private credit market also saw an increase in the launch of private credit collateralized loan obligations (CLOs), which package up portfolios of private credit loans that are then securitized and sold off in tranches.
Bank of America forecast that the market was on track to deliver US$50 billion worth of private credit CLO formation by the end of 2025 – an all-time high. Executing private credit CLO deals required private debt managers to invest in additional accounting and legal expertise to manage the securitization process, structure special purpose vehicles to house portfolios, obtain ratings, and manage ongoing CLO administration.
Outsourcing partners stepped in to support private credit managers as they took on these higher back-office workloads and helped managers to focus on their core business of loan origination, underwriting and portfolio management in what proved to be an exciting but increasingly complex market.
Conclusion
Taken together, 2025 underscored private debt’s resilience and growing sophistication. Managers navigated a competitive environment marked by tighter margins, evolving borrower demands, and the increasing use of advanced fund and distribution structures.
Despite periods of market disruption, the asset class continued to attract capital and reinforce its role as a core component of private markets. As private credit strategies matured and operational expectations rose, the year demonstrated the sector’s ability to adapt, innovate, and maintain momentum in an increasingly complex landscape.
Real Estate: 2025 Year in Review
Real Estate Highlights from 2025
Despite tariff dislocation and geopolitical uncertainty, 2025 was a year of recovery and relative stability for real estate on the equity side.
Total real estate investment showed double-digit year-on-year gains in 2025, while real estate fundraising was set to beat 2024 totals.
Lower interest rates in the US and Europe brought down financing costs and debt markets were open for business.
The ongoing fall-out from the Chinese real estate crisis continued to linger and concerns about AI valuation bubble gave some cause for concern, but overall sentiment was positive the year drew to a close.
Maximilian Dambax
Global Head of Real Assets
Signs of Stabilization After Years of Volatility
Real estate entered 2025 on the back of prolonged macroeconomic and sector-specific pressures, including rising interest rates, weak bricks-and-mortar retail, and subdued office demand. Yet as the year progressed, falling financing costs, improving transaction activity, and pockets of resilience across logistics, data centers, and select regional markets signaled a broader reset.
While geopolitical uncertainty and tariff-driven volatility still weighed on sentiment, the asset class began to show clearer signs of stabilization compared with the disrupted post-pandemic period.
Market Recovery, Sector Divergence, and New Demands Drivers
After prolonged period of rising interest rates, declining bricks-and-mortar retail and falling office space demand post-pandemic, 2025 was a year of reset and recovery for real estate.
Despite market disruption in Q2 2025 following US tariff announcements, direct real estate investment activity rallied strongly in Q3 2025 to come in at US$213 billion for the quarter, boosting year-to-date transaction volumes by 21 percent on 2024 levels, according to JLL.
The STOXX Global 3000 Real Estate Index, meanwhile, was showing gains of close to 10 percent towards the end of 2025, as real estate real estate valuations stabilized following an extended run of market volatility and pricing uncertainty.
Steadier Outlook Support Fundraising
The improving backdrop for real estate investment was good news for private real estate fundraising, which fell to a five-year low in in 2024, but rallied through the course of 2025.
PERE figures showed real estate fundraising coming in at US$164.39 billion for the first nine months of 2025, a 24.1 percent year-on-year increase on the same period in 2024, and already close to matching the full year total of $167.39 billion for 2024. In another signal pointing to a fundraising recovery, the proportion of funds closing below target fell from 62 percent in 2024 to 49 percent through the first nine months of 2025.
Headwinds Still to Navigate
Annual fundraising for 2025, however, did not match the US$299.38 billion raised at the peak of the market in 2021, and global real estate assets under management remained on a downward slope, dropping to US$3.8 trillion according to the latest figures compiled by real estate industry associations ANREV, INREV, and NCREIF.
Green shoots did emerge, but the industry still had a way to go to claw back lost ground.
Real estate balance sheets were still stretched as a result of falling asset values and higher interest rates through the market downcycle. Refinancing debt remained challenging, and while lenders did afforded real estate borrowers breathing room by extending terms, a US$936 billion wall of commercial real estate debt is due to mature in 2026, according to S&P Global Market Intelligence, loomed over the industry
Real Estate investors also had to grapple with the ongoing fallout from the ongoing downturn in the Chinese real estate space, one of the biggest real estate markets in the world and a cornerstone of the Chinese economy, ran into its fourth year.
Despite various stimulus measures to support the Chinese market, real estate valuations didn’t improve, and large-scale developers have faced large losses and financial distress. The fallout rippled out, impacting other Asian property markets – and beyond.
Real estate investors also kept a close eye developments in the AI sector, the spur for investment in data center assets and one of the strongest real estate fundraising categories in 2025.
Rising concerns around the risk of an AI valuation bubble, however, surfaced in the final quarter of the year, leading to share price volatility in stocks with AI exposure.
Technology share prices stabilized following strong earnings reports and positive revenue forecasts from key players in the AI ecosystem, but real estate managers did take pause to spend more time sense-checking data center and AI investment cases.
Upward Trajectory
For all the complexities and challenges that managers encountered in 2025, interest rate cuts by central banks in the US, UK and Europe were a much-welcomed macro-economic development, and brought down debt servicing costs for real estate assets. This helped real estate dealmakers to refinance debt and push out maturity walls, as well as facilitate a clearer picture on asset valuations.
Indeed, closer alignment on pricing was observed in 2025 and positively impacted the market, with analysis from Savills analysis showing an increase in average real estate transaction sizes in 2025. According to Savills there was a 14 percent increase in the number of individual properties trading for more than US$100 million, and a 17 percent uptick in the value of portfolio and entity level deals. Big cheque sizes suggest increasing confidence on the part of buyers.
Fundraising trends, meanwhile, also indicated that private real estate managers were finding assets at attractive entry valuations, and add value to properties sentiment improved.
Opportunistic real estate investment strategies, which present the highest return potential but require significant upfront redevelopment and construction investment in underperforming assets, accounted for 40 percent of the real estate capital raised across the first nine months of 2025, according to PERE. This highlighted the opportunity to invest in assets that had been passed over in recent years because of market volatility.
Real estate investors also began to feel the benefits a favorable supply-demand imbalance (particularly in segments such as office real estate) that became a feature of the market as new developments went on hold due to market uncertainty and elevate financing costs in prior years.
In the office segment, for example, new groundbreakings had fallen to a record low in the US and Europe, according to JLL, and most new property pipelines had been pre-leased. As a result, global office leasing climbed to it is best level since 2019. Global office vacancy rates dropped, and prime sites were at a premium, supporting leasing growth.
Other real estate categories also looking in good shape, albeit with some regional differences.
In logistics real estate, for example, leasing improved in North America and Europe in Q3 2025, although Asia markets were more cautious on the back of tariff and export uncertainty, although logistics presented opportunity for savvy buyers who were able adapt to changes in trade policy. Retail was another bright spot, with store openings outpacing store closures in the US, according to JLL, while in Europe and high growth Asian economies premium sites were in high demand with space limited.
Real estate has had rough ride through the last 36 months, but as interest rates come down and valuations recover, 2025 marked a year where the asset class finally has a chance to turn the corner.
Conclusion
Despite persistent challenges—from the ongoing fallout in China’s property sector to volatility in office markets—2025 marked a turning point for global real estate. Falling interest rates, firmer transaction activity, and renewed investor appetite helped stabilize valuations and support a gradual recovery in fundraising.
Strength in logistics, data centers, and select regional markets further underscored the sector’s adaptability in the face of macro and structural headwinds. While not all segments rebounded equally, the broad improvement across pricing, liquidity, and sentiment suggested that real estate finally began to regain its footing after several difficult years.
Infrastructure: 2025 Year in Review
Infrastructure Highlights from 2025
Private infrastructure posted excellent fundraising numbers in 2025 as managers reaped the rewards for delivering solid returns.
Investment cases benefitted from favorable long-term growth drivers, with digital infrastructure and power driving deal flow.
Areas of complexity emerged in the renewables sub-sector, where the US and European markets diverged.
Infrastructure secondaries and infrastructure debt provided infrastructure GPs and LPs with welcome pools of liquidity.
Maximilian Dambax
Global Head of Real Assets
Growth Anchored by Fundamentals
Infrastructure continued to demonstrate resilience in 2025, supported by strong fundraising momentum, robust long-term demand drivers, and solid underlying fundamentals across core and emerging sub-sectors.
While market volatility, policy shifts, and technology-led disruption influenced activity, investors remained focused on the asset class’s capacity to deliver stable returns and capital deployment opportunities. These dynamics shaped a year marked by both sustained growth and evolving complexity across the global infrastructure landscape.
Market Performance, Capital Flows, and Sector Dynamics
The positive long-term outlook for infrastructure investment growth and a good run of returns boosted private infrastructure fundraising in 2025.
By the end of Q3 2025 private infrastructure fundraising had already achieved a record annual high, as fundraising for the first nine months of 2025 reached US$200 billion – the first time the asset class had crested the US$200 billion mark ever, according to Infrastructure Investor data.
The share of private infrastructure funds closing on target, meanwhile, climbed more than three-fold, from nine percent in 2024 to 31 percent in 2025. Funds also took less time to reach a close, with average time on the road down by more than six months when compared to the previous year.
The strong 2025 fundraising numbers reflected private infrastructure’s consistent returns performance. Analysis of the MSCI Private Infrastructure Asset Index by commercial real estate services and investment business CBRE showed private infrastructure posting 11.5 percent rolling one-year total returns – outperforming listed infrastructure and global bonds over a three- and five-year investment horizon.
The industry’s returns performance was grounded in solid underlying fundamentals, with the requirement for investment in water and sanitation, electricity and power, and transport and logistics capacity increasing as global populations grow.
These fundamentals supported positive growth in global private infrastructure investment, with CBRE analysis of Infralogic data showing a 22% year-on-year gain through the first nine months of 2025, with investment reaching US$960 million for the period.
Shifting Ground
One of the single-most important drivers of infrastructure’s overall performance and deal flow in 2025 was the data center market, where huge investment in AI spurred robust demand for digital infrastructure.
McKinsey forecast in the summer that capital expenditure on data center infrastructure could reach as much US$1.7 trillion by 2030 – predominantly driven by AI expansion.
The positive momentum from the data center boom rippled out into other infrastructure sub-sectors, most notably power. Electricity consumptive data centers drove up power demand and pricing, with McKinsey models projecting that data power center would require1,400 terawatt-hours of power by 2030, representing four percent of total global power demand.
There were, however, some bumps in the road for the AI growth story during the year. In August a research report compiled by the Massachusetts Institute of Technology (MIT) found that 95 percent of organizations were deriving zero return from investments in AI, raising concerns of an AI bubble. Market anxiety around the sustainability of AI spending peaked again in November, leading to share price drops across the board for large technology companies.
Positive earnings from chipmaker Nvidia – a key bellwether for the sector – eased AI bubble concerns, but the year closed with infrastructure stakeholders taking a more measured approach on AI and data center growth projections.
Renewables Reset
Renewable energy was another infrastructure sub-sector that encountered volatility and complexity in 2025.
In July the US passed legislation to phase out tax credits for wind and solar projects by 2027, rather than the original 2032 deadline. This left developers facing truncated project timelines and under pressure to accelerate project developments, or risk losing tax credit benefits.
The phase out of tax credits followed an earlier executive order from the White House temporarily withdrawing offshore leasing for wind power, as well as the Securities and Exchange Commission (SEC) dropping its defense against state-led lawsuits challenging its climate-related disclosure rule.
The shifts in the US led to divergence from the European position, where the EU retained the key pillars of its environmental legal framework, including the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD), although the EU did bring forward proposals to ease the compliance burden of these directives for small and medium-sized enterprises.
The European Central Bank (ECB), meanwhile, continued to integrate climate risk into its operations, and the European Investment Bank (EIB) signed off on €15 billion of green transition funding.
This left infrastructure managers with US and European LP bases and operations having to walk a fine line between the ESG and climate priorities of US and European regulators and investors.
Nevertheless, renewables still represented the single biggest category for infrastructure fundraising in 2025, with the US$20 billion raised for Brookfield’s Global Transition Fund II – which will focus on investment in the transition to clean energy – the third biggest infrastructure fund close in the first nine months of 2025. Brookfield cited an “any and all” approach to ramping up power capacity as a key driver of low carbon energy production, with clean energy an essential component to meet growing demand for power, not just from data centers, but also from the electrification of transport and industry.
Political instability may have shaken up the investment case for investment in decarbonization and renewable energy infrastructure, but investors continued to see long term value in the industry.
Sophisticated Structuring to the Fore
Infrastructure also saw momentum build in areas such as infrastructure secondaries and infrastructure debt, which injected additional liquidity and flexibility into the asset class.
According to private markets investment adviser Stafford Capital Partners infrastructure secondaries deal volume was on track to climb by around 50 percent in 2025 and reach approximately US$15 billion for LP-led deals, and between US$15 billion and US$20 billion for GP-led transactions.
The increase was spurred by a combination of the liquidity requirements of private markets programs and the use of secondaries markets to manage exposure to regulatory change and geopolitical uncertainty.
Infrastructure debt provided a similarly useful pool of liquidity to complement infrastructure M&A and project development, as well as offering investors an opportunity to diversify their fixed income portfolios and lock in consistent yields uncorrelated to public markets.
Infrastructure debt assets under management (AUM) grew at a compound annual growth rate (CAGR) of 23.1 percent, according to Institutional Investor, and positioned infrastructure debt as an increasingly sizeable and influential constituent of the infrastructure funding mix.
The growth of these adjacent pools of capital in the infrastructure ecosystem provided valuable support to infrastructure dealmakers, who sought out partners to provide liquidity and share risk.
Conclusion
Overall, 2025 reinforced infrastructure’s position as a resilient and strategically important private markets asset class. Strong fundraising, dependable performance, and accelerating demand in areas such as digital infrastructure supported continued growth, even as policy shifts and renewables volatility added layers of complexity for managers and investors.
The expanding role of infrastructure debt and secondaries, combined with divergent regulatory developments across the US and Europe, further shaped capital flows and operating conditions. Despite these challenges, long-term fundamentals remained intact, underscoring infrastructure’s ability to adapt and attract capital in a rapidly evolving environment.
How Alter Domus’ Integrated Digital Ecosystem Powers Every Stage of Private-Equity Fund Administration
Discover how Alter Domus’ integrated digital ecosystem streamlines fund administration end-to-end—delivering real-time visibility, automated workflows, unified reporting, and audit-ready accuracy across every operational layer.
Private-equity firms don’t lose time because they lack expertise; they lose time due to internal fragmentation and disconnected processes their fund administration partners. When data sits in separate systems, reconciliation becomes routine, and insight comes too late. Investors ask for real-time visibility; regulators, investors, and internal stakeholders demand audit trails; CFOs and COOs must deliver both.
At Alter Domus, our goal is to help clients operate with absolute confidence in their data and processes – enabling faster decisions, stronger investor trust, and greater operational efficiency. We do this by connecting every stage of fund administration into one coherent digital ecosystem streamlining every process. Our integrated architecture unites accounting, workflow automation, reporting, and investor-facing platforms in a single, auditable framework.
Clients benefit from a continuous, validated data flow that enhances accuracy, accelerates reporting, and builds confidence across every stakeholder —from fund controllers to limited partners.
Data Integrity That Powers Decision-Making
Accurate decisions start with clean data. Alter Domus integrates accounting and investor data directly into its architecture, validating each transaction and synchronizing ledgers in real time across entities, currencies, and GAAP standards. CFOs gain instant visibility into true positions and can sign off with confidence.
Clients benefit from complete, audit-ready accuracy that removes reconciliation overhead and transforms financial control into strategic agility.
Technical detail and benefits:
Real-time ledger validation—detects anomalies before period close, cutting manual corrections.
Automated multi-GAAP consolidation – delivers consistent reporting across global structures.
Unified reporting schema—links fund, SPV, and investor data to support combined reporting, improving clarity and reducing manual compilation work.
ILPA-aligned reporting outputs—supports industry-standard formats for smoother submissions and auditor collaboration.
Intelligent Workflows That Reduce Risk
Every delay, email, or version error adds cost and risk. Alter Domus’ Workflow Platform replaces fragmented task management with rule-based automation that standardizes every recurring process—capital calls, distributions, investor transfers, fund-of-fund commitments, and period-end reporting.
Clients benefit from predictable, transparent processes and the ability to trace ownership and progress in real time. Workflows cut turnaround times, improve accuracy, and support continuous auditability across global teams.
Technical detail and benefits:
Configurable workflow logic with automated routing—ensures approvals follow defined rules and reduces exceptions.
Timestamped audit trails and SLA dashboards—provide measurable accountability for internal and outsourced teams.
Automated data hand-offs—remove manual entry and reduce operational risk.
Integrated document approval layer—captures rationale and sign-off history for regulators and auditors.
Unified Client Experience Through CorPro
Operational transparency is no longer optional. The CorPro Portal, Alter Domus’ proprietary client and investor portal unites workflow visibility, reporting, and investor communications within one secure environment. Dashboards show live KPIs and workflow status; the Investor Relations Hub centralizes notices and correspondence; and the Document Library stores version-controlled reports with multi-factor authentication.
Clients benefit from a single, branded digital interface that replaces fragmented communication with real-time collaboration and secure document sharing—improving responsiveness and consistency across every relationship.
Role-based access controls—protect sensitive investor and transaction data.
Embedded API links to accounting and reporting engines—keeps dashboards live and eliminates lag.
Centralized notification system—alerts teams to new deliverables or pending approvals instantly.
Reporting You Can Trust – ReportPro
Reporting is where operational excellence meets investor scrutiny. ReportPro, Alter Domus’ proprietary web-based reporting application, automates every step of the production cycle—drafting, validation, review, and release—directly from the accounting layer. Financial statements, capital account statements, and distribution notices are built with auto-footing, version tracking, and PDF-compare tools, allowing managers and auditors to collaborate securely in one space.
Clients benefit from faster cycles, zero-version confusion, and full traceability from source data to investor-ready report.
Technical detail and benefits:
Auto-footing and validation rules—remove manual spreadsheet checks.
Two-factor authentication and user-based rights—secure sensitive documents during review.
PDF-compare and version logs—provide instant visibility of changes for audit comfort.
Direct posting to CorPro—ensures investors receive approved documents immediately and securely.
Waterfall Governance, GP Carry, and Forecasting
Waterfall and carry calculations are too critical and too complex to rely on spreadsheets. Alter Domus’ dedicated waterfall and carry governance engine provides structured, auditable logic that ensures accuracy and consistency across funds and vintages.
Technical detail and benefits:
Automated waterfall calculations — reduce model risk, all data stored on-system.
Scenario analysis and forecasting — supports forward-looking portfolio planning
Centralized rule library — ensures consistent application across all funds.
Treasury Operations and Liquidity Management
Treasury functions must be both precise and nimble. Through your Treasury Management System, Alter Domus enables secure, controlled cash-movement workflows that integrate with a range of third-party systems, including accounting and reporting platforms.
Technical detail and benefits:
Centralized access to bank accounts across multiple banking relationships within a single, secure platform login.
Consolidated cash-movement reporting—enhances transparency for CFOs and auditors
The Power of an Integrated Digital Ecosystem
Our technology stack is not a collection of tools — it is a connected ecosystem. By linking accounting, workflow automation, investor communications, reporting engines, treasury management, and waterfall governance into one architecture, Alter Domus transforms historically manual processes into an efficient, end-to-end digital operating model.
Clients gain:
Real-time visibility
Fewer handoffs
Faster reporting cycles
Audit-ready transparency
A consistent experience across every touchpoint
This is operational equity — powered by purpose-built technology and delivered through deep private-markets expertise.
Transparent, Digital Investor Experience
Investors demand immediacy, clarity, and trust. Alter Domus’ CorPro Investor Portal delivers a modern interface that mirrors the GP’s internal data. LPs access dashboards showing NAV, commitments, and distributions; the Document Centre for historical statements; Onboarding modules for KYC/AML, and a Marketing Data Room for diligence materials.
Clients benefit from a professional, self-service investor experience that reduces queries, accelerates fundraising, and strengthens relationships.
Technical detail and benefits:
Real-time dashboards—give LPs instant insight into fund performance and cash flows.
Automated content alerts—notify investors when new reports are posted, increasing engagement.
Secure document storage and encryption—safeguards confidential LP information.
Integrated onboarding workflow—simplifies compliance checks and investor onboarding cycles.
Continuous Data Flow. Continuous Confidence.
Alter Domus’ architecture maintains end-to-end data lineage— with every data point traceable from transaction entry to investor report. APIs synchronize each module, ensuring continuous updates and analytics across accounting, workflow, reporting, and investor layers. The system scales effortlessly across outsourcing, co-sourcing, or lift-out models.
Clients benefit from consistent governance, reduced reconciliation cost, and a digital backbone ready for advanced analytics, ESG integration, and AI-driven insights.
Technical detail and benefits:
Bi-directional APIs—enable live synchronization with client environments.
Configurable data warehouse—supports advanced analytics without disrupting core systems.
Metadata lineage tracking—ensures every report references validated, traceable data.
Multi-jurisdiction framework—maintains consistency for global structures under varied regulatory regimes.
Turning Operational Precision into Performance
Alter Domus converts integration into impact. CFOs gain real-time control over fund financials and faster audit clearance. COOs run standardized, compliant operations that scale globally without losing visibility. Investor-relations teams deliver data and documents instantly, enhancing engagement. LPs receive timely, reliable information—strengthening trust and reducing due diligence cycles.
Clients benefit from a unified operating model that reduces risk, accelerates growth, and creates measurable operational alpha. Powered by more than 2,000 dedicated private equity professionals, we reinforce each operational process with deep expertise, strengthened further by advanced technology.
By blending industry-standard accounting engines with proprietary automation and digital portals, Alter Domus gives private equity managers a platform built not just for administration, but for advantage.
Future-Proofing Governance: Building Operational Strength for Endowments and Foundations
Discover how future-proof governance can transform your endowment’s operations into a strategic advantage. See why strong oversight, scalable systems, and expert partnerships are essential for sustainable growth.
For directors of investment operations, governance is the foundation of effective portfolio management, accurate data, and risk control. In today’s landscape of rising regulatory demands and complex alternatives, strong governance is also a strategic asset.
Future-proof governance enables teams to move beyond reactive measures, creating resilient systems that enhance accuracy and credibility. This shift allows teams to focus on high-value tasks that drive portfolio success.
Raising Standards with confidence
Operational teams must deliver timely, precise data to boards, auditors, and regulators, facing higher expectations for transparency and risk oversight. For leaders, this is an opportunity to demonstrate that governance is a competitive advantage.
Robust processes foster confidence, reduce rework, and empower investment committees with better decision-making tools. At Alter Domus, we see organizations that strengthen governance not only meet current demands but also confidently explore new strategies and investment opportunities.
What Future-Ready Governance looks like in Practice
Future-proof governance is about strengthening operational infrastructure. For investment operations leaders, it means:
Resilient systems that maintain accuracy and continuity through staff turnover or market disruption.
Scalable processes that can handle the growing demands of alternatives – managing capital calls, monitoring liquidity, and tracking performance, etc – without adding headcount
Integrated reporting that provides a single version of the truth for boards, auditors, and investment committees.
Independent oversight that validates calculations, reduces operational risk, and enhances credibility with stakeholders.
With these pillars in place, governance supports efficiency and insight rather than slowing things down.
Outsourcing as a governance accelerator
Many endowments and foundations operate with lean teams, making it challenging to invest in the infrastructure required for governance at scale. Outsourcing fund administration provides a solution by reinforcing internal teams rather than replacing them. A strong partner like Alter Domus delivers:
Independent NAV and reconciliations, creating objectivity and reducing the risk of error.
Best-practice processes, refined across hundreds of institutional clients and seamlessly integrated into the operating model.
Technology-enabled transparency, giving operations leaders instant access to dashboards and reports without heavy internal investment.
Capacity relief, allowing teams to redirect time and talent toward strategic projects rather than manual processing.
In this way, outsourcing becomes a governance accelerator, embedding institutional-quality controls and reporting into organizations with leaner resources.
Tangible benefits for operations teams
When governance is strengthened through the right systems and partners, operations leaders see immediate, positive impacts. Audits proceed with greater speed and efficiency, requiring fewer adjustments and minimizing back-and-forth communication. This streamlining allows teams to concentrate on strategic initiatives rather than administrative burdens.
Board and committee reports become timelier and more insightful, establishing operations as a trusted source of decision-ready intelligence. This evolution enhances the quality of discussions and decisions at the highest levels.
Risk oversight improves, enabling proactive monitoring of exposures, cash flows, and liquidity across complex portfolios, fostering a culture of preparedness. As operational credibility increases so does trust from boards, donors, and external stakeholders. This strengthened relationship, built on transparency and reliability, lays a solid foundation for future collaboration and success, positioning organizations for sustainable growth.
Governance as an enabler of operational excellence
For directors of investment operations, future-proof governance means building a robust infrastructure that navigates today’s complexities while adapting to tomorrow’s demands. It minimizes risk, boosts efficiency, and empowers teams beyond back-office functions.
At Alter Domus, we specialize in helping endowments and foundations achieve this balance. By merging deep expertise in alternatives with advanced technology and independent oversight, we transform governance into a strategic asset. The outcome is a reliable data environment, clear reporting, and investment staff focused on strategy rather than reconciliations. In this context, governance becomes an enabler of operational excellence, key to sustaining efficiency and trust for the future.
Explore how tech is reshaping fund administration through automation, APIs, and smart ops. Discover what GPs and COOs should prioritize in 2025.
The investment landscape has shifted dramatically, with fund administrators facing rising investor expectations, regulatory complexity, and market volatility. Traditional approaches no longer suffice.
Investors now demand greater transparency, faster reporting, stronger security, and lower fees—making technology the key differentiator between administrators that thrive and those that fall behind.
Most wealth managers already rely on digital platforms—94% of firms with $500M+ in assets and 61% of smaller firms use fintech to improve client engagement and efficiency.1 The question is no longer whether to adopt new technology, but how quickly and effectively it can be deployed to transform operations.
How Technology Is Transforming Fund Administration
From spreadsheets to smart systems
The journey from manual processes to intelligent automation represents perhaps the most significant shift in fund administration technology. Historically, fund administrators relied heavily on spreadsheets and manual data entry—approaches that were not only time-consuming but prone to human error.
Modern fund administration technology has evolved to replace these outdated methods with integrated systems that automate routine tasks. Advanced platforms now handle everything from NAV calculations to investor communications with minimal human intervention. This transition eliminates the bottlenecks associated with manual processing while dramatically reducing error rates and improving overall efficiency.
Digitization of workflows and document handling
Document management has traditionally been one of the most labor-intensive aspects of fund administration. The digitization of workflows and document handling represents a quantum leap forward, enabling administrators to process, store, and retrieve critical information with unprecedented speed and accuracy.
The benefits extend beyond mere efficiency. Digital workflows create audit trails that enhance compliance and security while reducing the risk of document loss or unauthorized access. For fund managers and investors alike, this translates to greater confidence in the integrity of administrative processes.
Role of APIs in real-time data sharing
Application Programming Interfaces (APIs) have revolutionized how fund administration systems interact with each other and with external platforms. By enabling seamless data exchange between previously siloed systems, APIs create a connected ecosystem that supports real-time information sharing and processing.
This connectivity allows fund administrators to integrate with banking platforms, trading systems, and investor portals, creating a unified experience for all stakeholders. Rather than waiting for batch processing or manual reconciliations, information flows continuously between systems, enabling near-instantaneous updates and reporting.
Benefits for GPs and Operations Teams
The power of RNFs becomes clear when comparing SCR requirements. Consider two scenarios:
Faster, more accurate investor reporting
Perhaps the most tangible benefit of fund administration technology is the transformation of investor reporting. Traditional reporting cycles often stretched over weeks, with manual data collection and verification creating significant delays. Today’s technology-enabled administrators can compress these timelines dramatically, delivering accurate reports in days or even hours. 81% of clients using fintech platforms in 2025 report higher satisfaction from greater transparency and easier access to investment data.1
This acceleration doesn’t come at the expense of quality. In fact, automated data processing and validation actually enhance accuracy by eliminating human errors and ensuring consistent application of accounting principles. Whether you’re a venture capital fund administration or managing traditional vehicles, digital tools compress reporting cycles from weeks to hours.
Improved scalability for fund growth
Traditional fund administration models faced inherent limitations when it came to scaling operations. Adding new funds or investors typically requires proportional increases in staffing and resources, creating operational challenges and cost pressures during periods of growth.
Modern fund administration technology breaks this linear relationship between growth and resource requirements. Cloud-based fund administration services can scale elastically as you grow—from managing a single fund in-house to migrating fund admin activities to a third-party platform. This enables administrators to support fund managers through growth phases without service disruptions or quality compromises.
Better risk management and compliance readiness
The regulatory landscape for investment funds continues to grow more complex, with new requirements emerging across jurisdictions. Fund administration technology has evolved to address this challenge through automated compliance monitoring and regulatory reporting capabilities.
Advanced systems now use regulatory rules engines to continuously monitor transactions and positions, flagging potential compliance issues early for proactive remediation. This reduces risk and workload for operations teams, replacing manual tracking and sampling with automated, comprehensive monitoring.
Comparing Traditional vs. Tech-Enabled Models
Manual bottlenecks vs. automated efficiency
The contrast between traditional and technology-enabled fund administration is clearest in operational bottlenecks. In conventional models, tasks like month-end reconciliations, NAV calculations, and investor distributions often create backlogs demanding all-hands-on-deck efforts.
Tech-enabled administrators remove these bottlenecks through automation. Reconciliations that once took days now finish in hours or minutes, with only exceptions flagged for review. NAV runs on set schedules with little manual input, and distributions flow through straight-through processes.
This shift goes beyond speed—it reshapes fund administration. Instead of routine data processing, teams now focus on exception handling, client relationships, and value-added analysis.
Fragmented systems vs. integrated platforms
Traditional fund administration relied on separate systems for accounting, investor services, compliance, and reporting, leading to integration issues, data inconsistencies, and poor user experiences.
Modern platforms take an integrated approach, spanning all functions to ensure data consistency, streamline workflows, and deliver a cohesive experience. With all data stored in a single ecosystem, administrators can produce comprehensive reports and analytics without the transformation challenges of fragmented systems.
What to Look for in a Technology-Forward Partner
Infrastructure maturity, flexibility, and security
When selecting a fund administrator, prioritize technology infrastructure. Leading partners invest in enterprise-grade platforms that combine reliability, flexibility, and strong security.
Mature infrastructure ensures uptime, processing power, disaster recovery, and robust change management to prevent disruptions. Flexible platforms support diverse fund types, complex structures, and a wide range of asset classes, including alternatives.
Security is critical amid rising cyber threats. Top administrators deploy encryption, multi-factor authentication, access controls, and continuous monitoring, while maintaining SOC 2 and ISO 27001 compliance.
Ability to scale with complex fund structures
As investment strategies grow more sophisticated, fund structures have become increasingly complex. When considering In-house vs third-party fund administration, look for providers whose platforms already support complex structures like master-feeder and venture capital fund administration.
These systems also scale to diverse investor needs, managing varied fee arrangements, tax treatments, reporting requirements, and side letters, ensuring all investor-specific provisions are accurately implemented and documented.
Conclusion
The technological revolution in fund administration represents both a challenge and an opportunity for investment managers. Those who partner with technology-forward administrators gain significant advantages in operational efficiency, investor satisfaction, and regulatory compliance.
As we look toward the future, tech like AI and machine learning will continue to enhance automation capabilities, while blockchain[1] and distributed ledger technologies may fundamentally transform transaction processing and verification. Data analytics will grow more sophisticated, providing deeper insights into portfolio performance and investor behavior.
For fund managers navigating this evolving landscape, the choice of a fund administration service provider has never been more consequential. By selecting providers with robust, flexible technology platforms and demonstrated commitment to innovation, they can ensure that their administrative capabilities remain aligned with their strategic ambitions—today and into the future.
Disclaimer: THIS MATERIAL IS PROVIDED FOR GENERAL INFORMATION ONLY, DOES NOT CONSTITUTE INVESTMENT ADVICE, AND PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
