LPs Concentrate Capital in Large Funds
Venture capital LPs have directed investments toward megafunds amid recent economic uncertainty. Through April of this year, 80% of all U.S. venture investment went to rounds of $500 million or more across just 29 companies, according to Crunchbase News. This concentration reflects a move away from traditional early-stage venture strategies.
Reported LP Performance and Allocations
For two years, LPs have reported that their venture allocations underperformed benchmarks. More than half of LPs said they are not considering investments in emerging managers. The shift trades specific company risk for the risk that large-vintage funds will outperform broader market indices.
IRR Data on Manager Types
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 sub-$100 million funds continued deploying capital and attracting founders during the period.
Platform Focus on Next-Generation Managers
Recast Capital operates as a 100% woman-owned platform that invests in and supports next-generation managers. Sara Zulkosky, co-founder and managing partner, stated that the largest institutions often cannot write checks small enough for emerging managers and therefore select broad exposure instead.
