Why financing strategy matters more in today’s private capital market

As private capital markets adjust to longer fundraising cycles and increased investor scrutiny, financing strategy is becoming central to how firms operate and grow. Amanda Coussens, EVP, Chief Financial Officer and Chief Compliance Officer at Ridgepost Capital, argues that liquidity planning can no longer be reactive. For private equity CFOs and COOs attending SuperReturn CFO/COO North America, embedding durable, transparent financing strategies into the platform's core is increasingly critical to maintaining flexibility, supporting portfolio companies, and driving long-term value creation.

Why has the financing environment changed?

Alternative asset managers are operating in a more measured environment than in recent years. While investment activity has begun to recover following a period of slower M&A, capital formation has become increasingly selective, and fundraising timelines are extending across asset classes.

These shifting dynamics are clearly reflected in recent private equity fundraising data. Approximately $490 billion was raised globally in 2025 [1], marking the second consecutive annual decline for the asset class. At the same time, capital is becoming more concentrated among established managers. According to PitchBook, the ten largest private equity funds captured roughly 46% of U.S. fundraising in 2025, the highest share in more than a decade. [2]

In this environment, financing can no longer be treated as an occasional solution used only during periods of market stress. To maintain operational resilience and position for long-term value creation, managers must embed a financing strategy into their operating model.

"Financing can no longer be treated as an occasional tool used only
during periods of market stress.”
- Amanda Coussens

Capital providers are underwriting durability

As access to capital becomes more competitive, financing providers are applying a broader underwriting lens. Beyond performance metrics, they are assessing the structural durability of platforms, including the stability of fee-related earnings, future fundraising visibility, investor concentration and the strength of operational infrastructure.

Firms that institutionalise reporting, forecasting and governance before they seek financing often maintain greater flexibility when engaging with lenders or structured capital providers. These capabilities help demonstrate predictability, discipline and risk management; qualities increasingly demanded by capital providers.

At the same time, investment activity is showing signs of recovery. Global private equity deal value increased by approximately 11% year over year in 2025, according to Bain & Company’s Global Private Equity Report 2026. [3]

This divergence - improving deal activity alongside more selective fundraising - reinforces the importance of durability. Managers must be able to operate through elongated fundraising cycles while continuing to support portfolio companies and pursue compelling investments.

Matching capital structure to strategic objectives

Second, managers need to be deliberate about matching financing tools to the objectives they are trying to achieve.

Over the past decade, the range of liquidity solutions available to private capital firms has expanded significantly. Used thoughtfully, these tools can support long-term value creation. NAV facilities, continuation vehicles, preferred equity, and GP-level financing solutions are now widely used across the market.

However, these liquidity tools are not interchangeable. Each operates at a different level of investment structure and carries different implications for alignment, governance and economics.

At Ridgepost Capital, this distinction is evident through the firm’s strategies, Hark Capital and Bonaccord Capital Partners. Capital provided by NAV lenders such as Hark is typically used to support fund-level objectives, including greater flexibility around exit timing, the ability to hold high-quality assets for longer, and bridging periods when fundraising or distributions slow.

By contrast, GP stakes investments, such as those made by Bonaccord, are designed to support corporate-level strategic priorities, including platform expansion, distribution growth and acquisitions. A critical component of GP stakes investing is alignment: ensuring firms gain a long-term partner that supports sustainable business growth rather than short-term financial engineering.

The key to employing any financing tool is clarity around purpose. Liquidity should ultimately support long-term value creation rather than short-term distribution optics.

Why transparency and process quality matter more than performance

Finally, in today’s environment, process quality and transparency are becoming just as important as performance when it comes to accessing capital. Limited partners are managing their own liquidity constraints and allocation pacing. That has translated into greater scrutiny of how managers approach financing transactions and liquidity solutions.

Industry standards are evolving accordingly. The Institutional Limited Partners Association (ILPA) is rolling out updated reporting templates beginning with 2026 reporting cycles, aimed at improving transparency and standardisation across private market disclosures. [4]

These efforts reflect a broader shift toward greater comparability and consistency in how private capital firms report performance and operational data. For managers, that means reputational capital is closely tied to process quality. Clear communication with LPs, thoughtful governance frameworks and demonstrable alignment all play a role in how financing transactions are evaluated.

Liquidity as a strategic advantage

Private capital remains fundamentally long-term in nature, but the operating environment has evolved.

Longer fundraising cycles, slower distributions and heightened investor scrutiny mean that liquidity planning can no longer be treated as a reactive exercise. Access to flexible capital will increasingly differentiate managers who can seize opportunities from those constrained by vintage cycles and liquidity timing. Firms that treat sponsor-level capital solutions as part of their core architecture, rather than temporary features, are likely to define the next phase of private equity.

In a more competitive capital environment, a structural, strategic approach to liquidity may prove to be one of the defining characteristics of the most successful private markets platforms.

Key Takeaways for CFOs and COOs

• Financing strategy is now a core operating capability, not a reactive tool
• Capital providers are underwriting durability and governance as much as performance
• Liquidity solutions must match strategic objectives across fund and GP levels
• Transparency and process quality are becoming critical to capital access

These themes will be explored in greater depth by CFOs, COOs and finance leaders at SuperReturn CFOCOO North America, where senior operators come together to discuss the evolving operating model of private capital platforms.

References

[1] S&P Global Market Intelligence – Private Equity Fundraising Totals Continue to Decline in 2025
https://www.spglobal.com/market-intelligence/en/news-insights/articles/2026/1/private-equity-fundraising-totals-continue-to-decline-in-2025-96694779

[2] PitchBook. – 2026 US Private Equity Outlook.
https://pitchbook.brightspotcdn.com/4a/6b/672f89f841c09dae57e59ff21319/2026-us-private-equity-outlook.pdf

[3] Bain & Company – Global Private Equity Report 2026
https://www.bain.com/insights/outlook-gaining-traction-global-private-equity-report-2026/

[4] Institutional Limited Partners Association – ILPA Reporting Template
https://ilpa.org/industry-guidance/templates-standards-model-documents/ilpa-templates-hub/ilpa-reporting-template/