As private equity adapts to a more challenging fundraising environment, European managers are redefining how they engage investors.

Longer fundraising cycles, muted distributions, and heightened selectivity from LPs have made differentiation, liquidity solutions, and transparency central to the conversation.

At the DACH Private Equity Insights Conference, leading voices from Pinova Capital, Brookfield Asset Management, Aurelius Group, and Millreef reflected on how these dynamics are reshaping capital formation across the region. Their discussion offered a clear portrait of a market that rewards conviction over scale.

Differentiation through focus

Managers agreed that the age of broad, generalist fundraising is over. Success increasingly depends on focus, either by sector, strategy, or operational edge.

Joern Pelzer, Founding Partner of Pinova Capital, underlined the importance of specialisation. “With smaller funds, you need to be very clear on what you stand for,” he said. “It’s not possible to raise multi-billion funds and focus only on industrial tech.” Pinova invests exclusively in industrial technology firms and targets mid-sized businesses that require internationalisation support.

Dirk Markus, Founding Partner of Aurelius Group, noted that clear positioning was also critical for larger investors. “In this environment, you need to stand for something,” he said. “Our strategy has been consistent for 20 years: operational excellence through a 200-person task force that creates value in complex situations.”

Liquidity – a competitive advantage

The liquidity squeeze affecting LPs has made secondaries and co-investments core to the fundraising toolkit. Secondary markets have evolved from niche liquidity providers into a structural component of the asset class, as both LPs and GPs actively manage exposures through portfolio sales and continuation vehicles.

Nico Taverna, Partner at Millreef, said that “private equity as an asset class is maturing” and that investors are now “taking a very active approach when it comes to managing their portfolios.” He added that secondaries are benefiting from current conditions: “Distributions from funds are low or at least below the historic average. That plays in favour of secondaries investing.”

Co-investments are another area where LP expectations have changed dramatically. Alexander Hütteroth, Head of Institutional DACH at Brookfield Asset Management, called them “a key element for successful fundraising.” They strengthen LP relationships and give investors greater exposure to preferred sectors. For managers, they provide the flexibility to execute larger or more complex transactions.

Evolving expectations around ESG

ESG considerations remain central for European LPs but are increasingly polarised across geographies. In Europe, Article 8 compliance is now seen as standard; in the US, attitudes vary widely by state and institution. The panel agreed that ESG reporting has become heavily bureaucratic, with limited consistency across investors, though many firms are now focusing on a smaller number of material topics such as climate, water, and waste.

Adapting to shifting macro and investor sentiment

Despite geopolitical volatility, managers said fundraising demand remains resilient, with opportunities emerging from dislocation. For special-situations investors, macroeconomic uncertainty is creating a steady pipeline of corporate carve-outs and restructurings.

There are also signs of renewed US interest in Europe. As one panellist noted, sentiment among American LPs has shifted over the past year: what was once considered “the old Europe” is now viewed as a diversification opportunity amid US market concentration.

Transparency and conviction define the next cycle

Across the discussion, transparency emerged as a defining expectation. LPs now demand greater visibility into portfolio construction, exit plans, and liquidity management. For many managers, this has become as important as performance itself.

Hütteroth summarised the shift succinctly: “Differentiation, liquidity, and transparency – those are the three things LPs expect now.”

After years of abundant capital, private equity fundraising in Europe is entering an era defined by clarity of purpose, demonstrable operational capability, and long-term consistency. Managers who can articulate a distinct edge, and deliver it, are the ones most likely to retain investor confidence in a more disciplined market.

by Andreea Melinti

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