In challenging fundraising environments like the one most GPs are currently facing, relying on re-ups (existing LPs re-subscribing to the next fund) is one of the few nearly certain aspects in an otherwise highly uncertain fundraising process. In my view, re-ups are a psychological game of Twister that GPs and LPs play, which can be aptly described as “expectations, assumptions, and implied loyalty mixed with a dash of subtle strongarming.” Historically, GPs have showcased their re-up rate by highlighting the percentage of LPs who committed to a subsequent fund and the increase in dollars from those LPs into that next fund, as a badge of honor. These days, due to the limited availability of capital for commitments across the industry, crowing about re-ups has generally become more tempered, now only occurring in cases of exceptional GP favorability among a broad range of LPs.
I thought it would be an interesting exercise to explore some of the dynamics at play regarding re-ups in the current climate of hand-to-hand combat for every available commitment dollar.
- GPs are boldly putting the performance projections of previous funds into their decks: Back in the day, even during fundraisings, questions from LPs like “Can you please tell me where you think your previous funds will land performance-wise?” were met with reluctant reactions and stern off-the-record constraints before divulging any thoughts on potential exit multiples of underlying companies (and hence the overall funds). Now, and of course, with the relevant disclaimers related to the pitfalls of predicting future market climates stated, I frequently see clear depictions of the likely performance of past unrealized funds in the decks of fundraising managers. This is a real 180-degree change. The obvious goal is to instill in the minds of existing LPs that past portfolios have tangible value that will be unlocked soon. I am curious to witness how and whether LPs who are swayed by these projections hold GPs accountable. It is a slippery slope, but I guess drastic times call for drastic measures.
- The “since inception” ploy is back stronger than ever during fundraising:In the past, when I pushed GPs about the underperformance of some of their funds compared to appropriate benchmarks, their response was sometimes to shift the performance discussion from a relative to an absolute one. Their argument was something like “all of our funds have generated over a 1.8x net” or “if an LP invested in all of our funds since inception, they would be sitting on a strong performance of ………..”. I am not disputing the validity of an absolute returns mindset, but I am not a fan of using it only in circumstances of deficiency – either fully adopt the absolute mindset from the onset of the pitch or don’t use it at all as a crutch when questions get tough. I am now seeing a variation of the continuous/absolute argument in the decks of fundraising managers. I believe the aim is to implicitly inform LPs that investors who remain with the GP throughout all fund cycles will continue to be rewarded in an absolute sense.
- That pesky “operations” thing is wreaking havoc: In times of reduced exits, realizations, and distributions, the decreased deployable capital in the coffers of LPs logically leads to increased selectivity because there is not enough money to re-up into all existing GP relationships. In the past, easy criteria such as likability, exclusivity, and recent exits were commonly used to determine where new capital is deployed. These days, LPs are more discerning when it comes to defining the core attributes of value, longevity, and navigating cycles. It turns out that value creation from operational improvement is becoming a key focus in the assessment of GPs. This can be seen in the current surge of web posts, newspaper articles, white papers, and other similar materials, which aim to unpack (for both lay and seasoned investors) what operational value creation in the sub-asset classes of private investing entails. As LPs build their knowledge around operational value creation, there can be an elongation of due diligence timelines caused by the request for more detailed information from GPs and the increased scrutiny of this information with greater skepticism than ever before.
- The fear of never being able to return has diminished: Although remnants of fear still exist in the hearts of some LPs about being unable to return to a fund if they show disloyalty or skip a fund in the sequence, many LPs are beginning to resist the psychological pressure from some GPs. The exclusivity and mystique of some GPs remain powerful forces in maintaining the loyalty of their LPs. Additionally, during past periods of relatively easy capital, many LPs did not necessarily want to undergo the brain damage of forming too many GP relationships – if possible, it was better to have a smaller number of manager relationships, but with larger amounts of capital deployed to each of them. Although during exuberant market cycles, there was enough capital to go around, some managers definitely became favorites through their mystique, exclusivity, and/or exceptional returns. This created a vicious cycle of re-ups, sometimes even without the appropriate time or information to make an informed decision. The scarcity of capital these days has instilled some fortitude in the veins of LPs, and many are less drawn to aesthetics and are concentrating more on substance.
- LP shaming is on the rise: I am hoping this does not become a trend, but I am randomly hearing of more and more disturbing instances where GPs are broadcasting names of non-re-upping LPs to justify fundraising delays or their inability to hit fundraising targets. I can empathize with the frustration that these GPs must feel, but this maneuver is unlikely to end well. Such behavior becomes an added negative data point that will be etched in the collective memories of the LP community. Things change with LPs all the time. Staff, mandates, investment committees, return targets, and other factors are all subject to change, so re-ups must be viewed as a privilege, not a birthright.
In today’s fundraising climate, the re-up cycle is shaped by evolving assumptions, heightened scrutiny, and shifting loyalties. GPs and LPs alike must navigate a landscape where operational value, transparency, and meaningful relationships matter more than ever. As habits and psychological pressures give way to substance, both parties are challenged to adapt. Ultimately, sustained success depends on trust, genuine performance, and a willingness to rethink old patterns.
Anthony Kwesi Hagan
Founder and Head of Research, FreedomizationTM
November 2nd, 2025
