Private market investing has become more demanding. Liquidity is tighter, fundraising cycles are longer, and limited partners are scrutinizing emerging managers more carefully than in previous years.
To understand how new fund managers are navigating this environment, I spoke with Dwayne Warren, Vice President at Blueprint Capital Advisors, a fund of funds and institutional advisory firm focused on private market investments.
Blueprint works with institutional investors to source and conduct due diligence on emerging and diverse general partners across asset classes and advises on more than $1.5 billion in assets across discretionary and non-discretionary accounts.
Our conversation explored how emerging managers differentiate themselves, how fundraising conditions have shifted for Black-led funds, and where opportunities may be developing within venture capital and private equity.
Fundraising is becoming more performance-driven
Warren entered Blueprint roughly three years ago during a period when many institutions were allocating capital specifically toward diverse fund managers. That environment has changed.
“I think when I came into the industry we saw diversity as a competitive advantage,” Warren said. “But we’re seeing a shift away from that notion.”
The broader pullback from diversity initiatives has affected fundraising for some managers who previously relied on those capital pools. As a result, performance is becoming an even more important factor in attracting investors.
Managers who demonstrate consistent results and disciplined portfolio construction continue to attract attention from limited partners. Warren believes funds that can show strong performance will continue to raise capital even as the fundraising environment tightens.
“The Black-led funds that focus more on performance aren’t going to have trouble,” he said.
What separates successful emerging managers
In a competitive fundraising market, emerging managers need more than a compelling narrative. Warren points to three factors that consistently matter to institutional investors: performance, differentiated expertise, and an institutional approach to building a firm.
Performance remains the most important signal. In a market with limited liquidity, investors are paying close attention to realized returns and distribution metrics such as DPI, which measures how much capital has been returned to investors.
Managers who can demonstrate early deal sourcing experience and successful investments within their focus sectors offer evidence that their strategy can produce results.
Sector expertise also plays a critical role. Managers with deep knowledge of a specific industry are often better positioned to support portfolio companies and compete for high-quality deals. Specialized experience in areas such as product development, commercialization, or industry networks can help firms differentiate themselves.
Institutional structure is another key factor. Investors increasingly expect emerging managers to operate with the systems and discipline of established firms. This includes maintaining comprehensive data rooms, preparing formal investment memos, and communicating consistently with limited partners.
Advisory networks can also strengthen a firm’s credibility by bringing experienced operators into the investment process and supporting portfolio companies.
Building stronger relationships with LPs
Fundraising success often depends on relationships developed long before a fund launch.
Warren encourages managers to stay engaged with limited partners even when they are not actively raising capital. Regular communication helps investors understand a manager’s strategy and investment philosophy over time.
“Speaking with LPs throughout the non-fundraising process is important,” Warren said.
Transparency is also essential. Limited partners want clear visibility into how portfolio companies are performing and how managers are responding to both successes and setbacks.
Providing consistent updates and offering co-investment opportunities can strengthen those relationships and create additional alignment between managers and investors.
Some managers also build networks among their own limited partners, creating opportunities for LPs to collaborate and share insights within the broader investment ecosystem.
Pitfalls that derail emerging funds
While emerging managers focus on differentiation, several common mistakes can quickly undermine credibility with institutional investors.
One of the most frequent problems is pursuing strategies that do not align with a manager’s expertise. Industries with high regulatory complexity or large capital requirements can be difficult to navigate without specialized experience.
Another challenge arises when managers attempt to raise institutional funds without first deploying capital. Some emerging managers address this by launching smaller pilot funds that allow them to prove their investment strategy before raising larger institutional vehicles.
Fund size can also become an issue. As funds grow larger, managers may find themselves competing directly with established venture firms for the same deals. At that stage, success often depends on brand strength, networks, and the ability to add value beyond capital.
Emerging opportunities in private markets
Despite fundraising challenges, Warren sees strong potential across venture capital and private equity.
Historically, smaller venture funds have often generated higher returns than larger funds because they can invest earlier and build more concentrated portfolios. This dynamic could continue to drive interest in emerging managers.
At the same time, some investors will continue allocating capital to large venture firms for stability and risk mitigation. This dynamic may create a split within the venture ecosystem between smaller funds pursuing higher returns and larger firms focused on scale.
Warren is also closely watching the growth of secondary markets, where investors buy and sell positions in existing portfolios.
The expansion of secondaries is partly driven by the current lack of liquidity across private markets. These transactions allow investors to enter investments later in their lifecycle, providing greater visibility into company performance while reducing some of the uncertainty associated with early-stage investing.
Expanding the pipeline for future investors
Warren, a graduate of Howard University, believes universities—particularly HBCUs—could play a larger role in preparing students for careers in venture capital and fund management.
One approach involves creating venture capital scout programs that train students to source and evaluate startups. Students could present promising companies to venture firms, and if those deals receive funding, a portion of the investment carry could support university programs or endowments.
He also sees potential in alumni angel networks that allow graduates to share deal flow and invest collaboratively.
These types of initiatives could expand access to investment careers while helping universities strengthen their financial foundations over time.
