New research from Carne Group (Carne), Europe’s largest independent third-party management company (ManCo), reveals that fund managers are entering 2026 with renewed confidence about growth and fundraising, even as institutional investors grow more concerned about valuation-related conflicts of interest and systemic risk across private markets.
Carne’s latest Change 2026 report, based on a survey of 200 C-suite executives at fund managers globally and 200 European institutional investors, shows optimism has returned, but with greater focus on discipline. 93% of managers expect higher inflows, the strongest confidence recorded since the Change research began, while 84% of institutional investors expect to take on more risk this year.
That confidence is being tempered by rising scrutiny. Institutional investors report becoming more forensic in how capital is deployed, with governance standards, valuation practices and liquidity risks increasingly shaping allocation decisions.
John Donohoe, Chief Executive Officer at Carne Group, said:
“Confidence hasn’t disappeared from the industry, it has matured. Fund managers are optimistic about growth and expansion, but that ambition is now paired with much sharper investor expectations around valuations, governance and risk. Growth is still very much on the agenda, but it has to be built on stronger foundations.”
Valuations have emerged as a key pressure point across private markets. Almost all institutional investors (99%) surveyed say they are concerned about valuation-related conflicts of interest, with more than half (55%) describing themselves as ‘very concerned’. These concerns reflect fears that optimistic valuations could amplify both liquidity and systemic risks as private markets continue to expand. Distributions to Paid-In Capital (DPI) is becoming a key metric as managers who are able to return capital to investors are more likely to get future allocations.
While fund managers are strengthening valuation governance, independent oversight remains limited. Just 2% currently use third-party valuation specialists, despite 92% of institutional investors expecting their use to increase over the next two years.
As private markets grow in scale and complexity, systemic risk is increasingly front of mind for both sides of the market. Nearly three-quarters (72%) of institutional investors say they are ‘very concerned’ about systemic risk, while more than nine in ten (92%) fund managers expect systemic risk in private markets to rise over the next two years.
Yet fund managers remain highly confident about growth: 90% plan to launch more products in 2026, with almost all (98%) expecting to raise capital in new overseas markets.
Many are also exploring new asset classes, with 95% preparing to launch funds outside their core areas of focus. This includes semi-liquid structures, with 89% of managers planning launches within the next two years.
The findings point to a market keen to grow but no longer willing to compromise on risk. Robust governance, valuation discipline and effective risk management are increasingly decisive in sustaining long-term growth.
Donohoe added:
“Investors are willing to allocate capital, but only where governance, valuation discipline and risk management are taken seriously. The next phase of growth in private markets will belong to managers who can meet that higher bar and keep their promises to investors on liquidity.”
