Despite Market Volatility, GPs Optimistic About Fundraising and Tech Investments in 2025, Dynamo Software Survey Reveals

For the third consecutive year, Dynamo Software’s proprietary research on trends, challenges, and opportunities facing General Partners (GPs) in the alternative investment sector provides valuable insights into the next 12 months. The survey, conducted in March and April 2025, gathered input from 80 GPs across various geographies and asset classes, including private equity, hedge funds, and venture capital. The findings are detailed in the Dynamo Frontline Insight Report, which highlights five key expectations from the global GP community. Raising New Funds Despite the market's volatility, a significant number of GPs (73%) plan to raise at least one new fund in 2025, indicating a high level of market confidence. About 40% of the GPs expect their fundraising activities to intensify compared to 2024. However, economic uncertainty has made projections challenging for 26% of the respondents, and only 4% anticipate a significant slowdown in fundraising. The top business challenge identified by the GPs is fundraising in the current market conditions, followed by "Deal activity" and "Increased holding periods." GPs recognize that raising funds will be arduous but remain optimistic about their strategies. Deploying Capital to New Geographies Interest in investing in the Asian market has grown substantially, with 30% of GPs planning to allocate capital there, a 22-point increase year over year. This surge in interest likely reflects the region's advanced AI and technology innovations, as well as corporate governance reforms, particularly in Japan. Geopolitical considerations, such as the potential for conflicts and trade tensions, were noted by GPs in earlier surveys, suggesting they have factored these risks into their decision-making processes. Spending More on Technology Technology spending is becoming a critical component for GPs, with 73% of respondents indicating they will increase their technology budgets, a significant jump from the previous year's 50%. GPs are focusing on technology areas that enhance day-to-day operations, such as "Deal sourcing and relationship tracking," "Fundraising and marketing automation," and "Data security and privacy." The most desirable outcomes from new technology implementations include improving deal visibility, automating compliance tasks, and enhancing investor communications. Dynamo Software CEO Hank Boughner emphasized that technology should empower employees and improve team efficiency, noting the importance of intuitive user experiences over flashy marketing. Strategizing for Market Volatility GPs are bracing for broader economic conditions by increasing their focus on due diligence and risk management. These areas are considered the most significant business impacts of the current global economy. Many GPs are also exploring new business models to navigate uncertain markets. For instance, 65% are actively targeting retail investors and high-net-worth individuals, reflecting a shift in their traditional investor base. Adopting AI The survey reveals a nuanced view of Artificial Intelligence (AI) and machine learning among GPs. While a majority named leveraging AI-powered decision-making tools as a top priority for 2025, integrating AI and machine learning technologies ranked lowest among the crucial factors for new tech implementation. This discrepancy may indicate a gap between strategic intent and operational readiness. Common barriers include regulatory uncertainties and the high cost of AI solutions relative to their proven benefits. Boughner advised that FinTech companies aiming to integrate AI should focus on practical, user-friendly applications that directly enhance daily workflows. He stressed the importance of a seamless user experience, ensuring that AI tools empower rather than distract employees. Summary of Key Findings Optimistic Fundraising Plans: 73% of GPs plan to raise new funds in 2025, with 40% expecting increased activity. Geographical Expansion: 30% of GPs intend to invest more in the Asian market, driven by technology advancements and governance reforms. Increased Technology Spend: 73% of GPs will boost their tech budgets, focusing on deal tracking, fundraising automation, and data security. Market Volatility Strategies: Due diligence and risk management are top priorities, with 65% of GPs targeting new types of investors. AI Integration Challenges: Despite AI being a priority, implementation lags due to regulatory hurdles and cost concerns. IndustryInsider Evaluation The optimistic outlook among GPs is a positive sign for the alternative investment market. Industry insiders, like Boughner, highlight the importance of technology in enhancing operational efficiency and investor relationships. The focus on practical AI applications suggests a cautious yet forward-looking approach, recognizing the need to balance innovation with practicality. Dynamo Software's platform, designed to integrate seamlessly into various aspects of investment management, positions the company well to meet these evolving needs. With operations across North America, EMEA, APAC, and the UAE, Dynamo is poised to support GPs as they navigate the complexities of a rapidly changing investment landscape.