LPs Concentrate in Megafunds as Emerging Managers Show Higher Returns
Venture capital LPs have concentrated investments in megafunds during the past 12 months of economic uncertainty. Through April, Crunchbase data shows 80% of all U.S. venture investment went to rounds of $500 million or more across 29 companies. According to Crunchbase News, this shift represents a flight from venture risk to returns risk.
LP Allocations and Benchmarks
For two years running, LPs have reported venture allocations underperforming benchmarks. More than half say they are not considering investments in emerging managers. The largest institutions often cannot write checks small enough for emerging managers or reach them through funds of funds.
Emerging Manager Performance
A study of nearly 2,500 VC funds from 2000 to 2024 found emerging managers posted an average IRR of 17.15% compared with 9.94% for established managers. According to Crunchbase News, smaller funds under $100 million continue deploying capital and attracting founders during the current cycle.
Platform Focus
Recast Capital is a 100% woman-owned platform that invests in and supports next-generation managers. Sara Zulkosky is its co-founder and managing partner. According to Crunchbase News, the platform targets managers who maintain high-conviction, early-stage strategies rather than asset-gathering approaches.
