Emerging managers: don’t count them out just yet

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Have emerging managers has been on the same roller coaster as startups in recent years. Funding for these young companies picked up in 2021 as business was generally hot, but in line with the broader market, fundraising has slowed to a trickle since early 2022.

The trend continued into 2023. New data from PitchBook shows that US-based emerging managers collectively raised $1.62 billion in the first quarter. This does not put this group on track to reach 2022 volume, which was $37.26 billion. And that was already lower than the $55.81 billion the year before. Experienced managers raised more than $10 billion in the first quarter of 2023.

Emerging managers raised 14% of total capital raised, the lowest percentage in years. Vincent Harrison, a venture analyst at PitchBook, said the tough environment for emerging executives doesn’t look like it’s going away any time soon either.

“This is somewhat to be expected: 2022 was a tough year,” he told gotechbusiness.com+. “The market is so reactionary. Naturally, when things went down in the public market, people were more cautious. Since it is a risky asset class, it affects people’s willingness to put money into it.”

But I don’t know, I just can’t shake my optimism about these young investors.