Fairview Capital recently released its annual review of women- and minority-owned private equity and venture capital firms.
The report tracks a market that expanded significantly over the last decade while entering a more selective fundraising environment in 2025.
The number of women- and minority-owned firms actively raising capital declined by approximately 12% in 2025, marking the first decrease Fairview has recorded since it began publishing the report in 2014. The firm now tracks nearly 1,200 women- and minority-owned private equity and venture capital firms across the United States.
Fund sequence data provides a clearer view into how the market is developing. In 2025, approximately 53% of women- and minority-owned firms raising capital were still raising a first-time fund. Only 10% were raising a fourth fund or beyond.
For Black-led investment firms specifically, Fairview identified 135 African-American-owned firms raising capital in 2025, with approximately 59% raising a first-time fund.
Building a firm that can survive long enough to raise successive institutional vehicles remains one of the defining dynamics across the market.
A More Concentrated Fundraising Environment
The report describes a private market environment shaped by reduced liquidity, slower distributions, and increased concentration of capital among larger firms. Institutional investors became more selective as fundraising timelines extended and fewer firms reached target fund sizes.
Fairview also notes that fundraising became increasingly momentum-driven, with early commitments carrying greater weight in determining whether a manager successfully closes a fund.
Established firms often enter fundraising cycles with existing LP relationships, prior portfolio realizations, larger operating infrastructure, and institutional track records already in place. First-time managers are frequently building those relationships while simultaneously fundraising.
The ecosystem continued expanding over the last decade, with progression into Fund III and Fund IV platforms occurring across a smaller portion of firms.
Why Fund II and Fund III Matter
Fund launches signal continued firm formation. Successor funds provide a clearer view into institutional durability across the market.
A first-time fund can establish access to the market and prove an investment thesis. Raising a second or third fund requires portfolio construction discipline, deployment pacing, reporting systems, LP communication, and evidence that the platform can continue operating across multiple market cycles.
The data shows progression occurring within the ecosystem. The share of firms raising second funds increased from 16% in 2014 to 24% in 2025. The proportion of firms raising fourth funds or beyond also increased in recent years.
The relatively small share of Fund IV+ managers highlights the concentration of long-term institutional scaling across the market.
Institutional permanence changes how firms operate within the market. Firms raising later-stage successor funds often gain more stable LP relationships, broader access to co-investment opportunities, and greater flexibility during slower fundraising environments.
Venture Capital Continues to Dominate
The report also shows that venture capital remains the dominant strategy among women- and minority-owned firms raising capital. In 2025, approximately 73% of firms in market were raising venture capital funds.
That concentration reflects the lower capital requirements and smaller fund structures commonly associated with venture investing. Median venture fund targets were approximately $50 million, compared to approximately $350 million for buyout funds.
Smaller fund sizes can lower barriers to entry and allow newer firms to specialize around sectors, founder networks, or emerging technologies. Fairview also observed an increasing number of managers entering the market with prior experience at established investment firms or with domain-specific operating expertise, particularly around artificial intelligence and emerging technology sectors.
That shift increasingly positions emerging managers around specialization and sector expertise.
A Market Moving Into Its Next Phase
The report describes an ecosystem continuing to expand alongside increasing institutionalization and fundraising selectivity.
More firms are entering the market. More managers are progressing into successor funds. Fundraising conditions tightened as capital became more concentrated and fewer firms reached durable multi-fund scale.
For Black-led investment firms, the next stage of development may depend on how many firms successfully transition from Fund I managers into long-term institutional platforms.
