Barnes & Thornburg announced today the release of its third annual 2025 Investment Funds Outlook Report , which draws on survey responses from U.S.-based limited partners (LPs), general partners (GPs), and service providers to deliver an in-depth analysis of today’s private investment funds landscape.
Amid widespread market turbulence and heightened liquidity pressures, the report explores how U.S. investment professionals are navigating top economic and regulatory challenges—from the increased use of key fund terms and an evolving LP-GP dynamic to new compliance priorities and investment opportunities. The report also spotlights three key sectors that respondents believe can thrive in the year to come: hedge funds, private credit, and cryptocurrency.
Some of this year’s key findings include:
- Volatility presents new challenges and opportunities. Despite a turbulent start to 2025, the majority of respondents view the general economic outlook (72%), availability of capital (66%), and regulatory environment (64%) as investment opportunities. But challenges are mounting, too: LPs are noticeably more concerned about financing terms, transparency, and ESG—and GPs more concerned about fundraising, returns, and regulatory risk—than in 2024.
“While many GPs came into this year very optimistic about expected fundraising, for many managers that optimism has been tempered so far, in part due to market volatility and economic uncertainty,” says Scott L. Beal, partner and co-chair of Barnes & Thornburg’s Private Funds and Asset Management Practice.
- Investors and managers are using every fund structuring tool in the toolbox to manage current economic conditions. More than half of respondents anticipate heightened use of the various fund terms we asked about, such as investment period extensions (72% expect an increase in 2025), LP-led use of securitization techniques (72%), changes in distribution of fund proceeds (69%), and term extensions (69%).
“The marked increase in the level of investment restrictions and access to secondaries speak to efforts by investors to establish additional guardrails in today’s market,” says Maria Monte, partner in Barnes & Thornburg’s Private Funds and Asset Management Practice.
- Cybersecurity and AI are top compliance focus areas. Though respondents are relatively split on whether the Trump administration is making compliance with fund regulation and policy more or less challenging, LPs and GPs agree that cybersecurity/data management and AI are top compliance priorities in 2025. From there, however, LP and GP views diverge, with LPs more focused on liquidity management, ESG, transparency, and national security and GPs more concerned about fund valuation and tax issues.
“This year’s findings may be a message for GPs that, in addition to returns, LPs are increasing their focus on strong governance, transparency, and succession planning,” says Jahan Sharifi, co-chair of Barnes & Thornburg’s Private Funds and Asset Management Practice. “In an unpredictable economic landscape, investors may look to control what they can control to protect their capital.”
Barnes & Thornburg surveyed 121 U.S.-based LPs, GPs, and service providers sourced through a third-party survey panel provider. The online survey was conducted in March and April 2025. To learn more, download the Barnes & Thornburg 2025 Investment Funds Outlook Report.