A new report by Gen II Fund Services reveals that 40% of fund managers expect investors to increase their allocations to private capital, while another 33% expect investors will maintain current levels and 27% of fund managers expect investors to reduce their exposure.
The Core Alternative Managers' Mood Index (CAMMI) report showed renewed optimism comes as the overall CAMMI score rebounds to 56.61, up from 42.37 last year, signalling increased optimism across private capital markets.
The CAMMI report is based on responses from 122 fund managers across Europe (52.8%) and the UK (47.2%). Respondents include Investment Directors/Fund Managers (33.6%), CFOs (17.2%), CCOs (8.6%), COOs (8.6%) and other key roles. Firm sizes range from under $100m to over $10bn in AUM, with 38.4% managing $500m-$5bn. The majority (75.6%) of respondents' latest funds are domiciled in Europe.
Its key findings signal strong market confidence, with nearly three-quarters of managers expecting investors to either increase or maintain their allocations, positioning the private capital market for growth in the coming year.
Venture Capital emerges as the sector attracting most interest, scoring 59.05 on the CAMMI index.
Alex Di Santo, head of private equity, Europe, at Gen II, noted the optimism in this space, saying: "With steady demand from institutional investors for early-stage, innovation-driven investments, especially around themes like technology, health and energy, good market opportunities are returning.
"Consequently, this score is also a vote of confidence from these fund managers that the fundraising environment in 2025 will be easier than 2024."
While Private Equity remains positive overall, traditional strategies such as buyouts are showing a slight slowdown with a CAMMI score of 55.19.
Fund managers anticipate fundraising to be at a slower pace than recent years due to heightened competition and consolidation with large players.
Secondaries are currently marked by a blend of cautious sentiment and long-term growth potential, underscored by emerging technological innovations such as secondaries tokenisation.
Real Assets are also gaining significant traction, with a CAMMI score of 58.87 indicating strong momentum. The report highlights a particular focus on the residential sector, driven by urbanisation trends, rising rents, and supportive policy initiatives.
Many fund managers explained how they are diversifying into sectors where they see more resilience and growth potential. This is often driven by a need to adapt to the changing market and capitalise on growth opportunities while managing risk.
Private Credit is expanding, albeit cautiously, with a CAMMI score of 55.83. This indicates potential for growth following a period of contraction, as managers carefully navigate the evolving credit landscape.
The report also highlights emerging trends reshaping the industry. Cybersecurity has risen to become the second most important topic in investor due diligence processes, reflecting growing concerns about digital threats. Meanwhile, tokenization is gaining traction in the secondaries market, potentially transforming how investors access and trade private market assets.
CAMMI is an index of the prevailing direction of allocation trends in private equity, real assets and private credit. It consists of a diffusion index that summarises whether allocations for each sub-asset class, as viewed by fund managers, is increasing, staying the same, or decreasing. The purpose of CAMMI is to provide information about the current and future asset allocation sentiment of various asset and sub-asset classes to the market.
The headline CAMMI is a number from 0 to 100. A CAMMI above 50 represents an allocation increase when compared with the previous month. A CAMMI reading under 50 represents an allocation decrease, and a reading at 50 indicates no change. The further away from 50 the greater the level of change.
