Streamlined Ops, Stronger PEVC Returns

Investors are tightening their purse strings amidst the prevailing market headwinds, and as a result private equity and venture capital (PEVC) managers are having to go the extra mile to secure Limited Partner (LP) commitments – a strong track record is no longer enough to win institutional mandates anymore.

If General Partners (GPs) are to attract the big-ticket investments, they need to ensure their operations are in excellent shape.

PEVC dealmaking hits a roadblock

PEVC managers have gone through a difficult period of late, as volatile markets and complex geopolitics put the brakes on deal-making activity.

“As exits, e.g. IPOs, M&A, dried up, so too did LP distributions and investors’ ability to access much-needed liquidity, all of which has prompted institutions to hold back on making PEVC allocations,” said Martin Punt, Senior Director – Fund & Corporate Services.

After raising $1.15 trillion in 2021, inflows into private equity have declined each year since, with the asset class attracting $763.9 billion in 2024[1].

Although private equity has accumulated $424.5 billion in H1 2025, corresponding to more than half of what the industry raised during the whole of 2024, there are concerns flows could falter if IPO exit volumes remain flat.[2]

A similar scenario is being played out in venture capital circles too. While there was a fundraising frenzy at the start of the decade – $188.5 billion in 2022 – inflows have tapered off over the last few years with just $76.1 billion being allocated in 2024[3].

Exacerbating matters further is that PEVC managers’ costs are only trending upwards, as regulation, evolving client demands, and operational complexity continue to exact pressure on the industry’s business model.

Getting operations in order

If PEVC firms are to navigate the unpredictable markets and ultimately flourish, they will need to digitalise their core operations.

For many firms, automation of ancillary activities, such as LP or regulatory reporting and client onboarding, is key to generating operational synergies. A reliance on legacy technology stacks increases the risk of errors, whilst the systems are not only expensive to run and maintain but are also a major drain on resources.

“The current market is forcing everyone to tighten their belts and PEVC is no exception. PEVC firms are trying to identify ways to make their operations as efficient as possible,” noted Punt.

In addition to keeping costs in check, digitalisation makes for a better investor experience too, e.g. frictionless reporting, quicker onboardings, etc.

“Those firms which provide clients with the best investor portals will do well moving forward. Allocators, particularly younger investors, do not want to have a constant, fragmented flow of email traffic with their managers,” said Thean Lourens, Associate Director – Fund Services.

Portals allow for documents and reports to be stored centrally and securely and are easily accessible to LPs via their smart phones or tablet devices. Automated and efficient reporting processes are what PEVC investors are looking for,” he continues.

Those GPs who embrace operational best practices are also at a competitive advantage.

“Investors are putting money into funds who deliver a genuine value-add. In a market where there are a lot of GPs seeking investment, those firms with quality operations e.g. good governance, solid compliance systems, as well as performance, will be the main beneficiaries,” said Punt.

“While some PEVC firms have the resources to manage these functions in-house, others may choose to delegate them to third-party providers. These providers not only deliver the necessary infrastructure and governance frameworks, but also offer the independent support that gives investors greater confidence—making outsourcing a clear value-add”, said Amber Aliu, Associate Director – Corporate Services.

However, if PEVC do choose to outsource certain processes, they must appoint best-in-class service providers, who are well-versed in illiquid asset classes and how they work.

Managers need to engage with service providers who can support them with their various operational and regulatory compliance idiosyncrasies, so that they focus their resources on generating returns, and building – and maintaining – client relationships.

JTC combines decades of experience with a deep understanding of PEVC investment structures. From setup through to ongoing administration, JTC supports managers with their operations, compliance needs and investor reporting.

“Investing in technology keeps us competitive, but it’s the combination of tech with the human element that helps us stand out,” concludes Amber.

[1] S&P Global – July 24, 2025 – Private equity fundraising rises in H1 2025, more capital hinges on IPO exits

[2] S&P Global – July 24, 2025 – Private equity fundraising rises in H1 2025, more capital hinges on IPO exits

[3] Pitchbook /NVCA – Q4 2024 – Venture Monitor