For the fourth consecutive year, GPs around the globe surveyed by Dynamo said fundraising remains their most significant challenge. Yet, if Dynamo Software’s latest Frontline Insight Report demonstrates anything, it is that today’s alternative investment firms are responding to adversity with innovation and confidence.
The 2026 survey seems to indicate that GPs have largely accepted market uncertainty as the new normal. While securing LP commitments has been more difficult, firms are simultaneously increasing technology budgets, hiring additional staff, launching new funds, and refining investment strategies to meet evolving investor demands.
The findings show just how the alternatives industry is moving into a period of strategic adaptation.
Fundraising Remains Difficult, but Confidence Continues
Fundraising in current market conditions was cited by respondents as their top challenge again in 2026, for the fourth year running. 71% cited persistent difficulty in securing LP commitments, a significant increase from 50% in 2025. The finding highlights how competitive the capital-raising environment has become as LPs remain selective and manage portfolio allocations carefully.
However, one of the survey’s most striking findings is the gap between fundraising difficulty and GP confidence.
Nearly three-quarters (73%) of respondents plan to launch a new fund within the next 12 months. Furthermore, 70% expect fundraising activity to either remain steady or increase over the coming year.
This resilience suggests that GPs remain confident in their ability to identify attractive opportunities and convince investors of their value proposition, making the real challenge how to differentiate in a crowded marketplace.
In response to choosy LPs, GPs will need to rely more heavily on specialized expertise, proven performance, transparent communications, and stronger relationship management to stand out.
The Search for Capital Expands Beyond Traditional Channels
The 2026 GP survey drew attention to an important shift in fundraising strategy. Many GPs appear eager to diversify their capital sources beyond traditional institutional investors.
Among all investor channels, high-net-worth individuals and family offices emerged as the area receiving the greatest increased focus. More than 65% of GPs reported increasing attention on this segment, significantly outpacing institutional investor channels and intermediary distribution channels.
Institutional channels remain important, but the survey suggests firms recognize that securing commitments from pensions, endowments, foundations, and sovereign wealth funds requires increasingly intense competition and longer fundraising cycles.
The growing emphasis on family offices and wealthy individuals may provide GPs with greater fundraising flexibility while creating opportunities to develop more customized offerings.
AI Priorities Shift Dramatically
While AI adoption ranked low on the priority list in 2024 and 2025, the narrative has shifted dramatically this year. In 2025, AI was still largely viewed as an emerging opportunity, but in 2026, AI has become the top strategic priority for GPs.
“Leveraging AI-powered tools to enhance decision-making and predictive analytics” ranked as the number one priority among respondents, surpassing traditional concerns such as portfolio value creation and investment structure management.
Technology spending is following course as nearly 80% of firms plan to increase technology budgets this year, up from 73% in 2025.
How GPs intend to deploy AI is also worth noting. The majority (62%) plan to adopt AI through third-party software platforms that embed AI capabilities directly into existing workflows. At the same time, 55% said they are pursuing customized AI-as-a-Service initiatives to build proprietary capabilities tailored to their investment processes.
This combination draws attention to how GPs are exploring dual tracks. Firms want the speed and scalability of commercial AI solutions while also developing specialized capabilities that uniquely suit their needs, or may create competitive advantages.
Importantly, AI is no longer being viewed just through the lens of operational efficiency. GPs increasingly see it as a broad strategic enabler capable of improving investment decisions, enhancing deal sourcing, strengthening portfolio management, and accelerating value creation.
Technology Is Enhancing Human Expertise, Not Replacing It
One assumption surrounding AI adoption is that technology investments will reduce demand for talent. The survey suggests the opposite may be occurring in alternatives.
Despite rising technology expenditures and emphasis on AI, 54% of GPs also expect to increase internal headcount this year.
This finding highlights how much GPs still view success in private markets as dependent on human judgment, relationship-building, and investor trust. Rather than replacing these professionals, AI appears poised to enhance their best qualities. Automation can accelerate analysis and reduce administrative burdens, but investment decisions and investor relationships remain fundamentally people-driven.
The industry’s willingness to invest simultaneously in both technology and talent reflects that reality.
Direct Investments Continue to Gain Momentum
Another notable trend is the continued rise of direct investment strategies.
More than half of respondents (56%) expect direct investment allocations to increase during the next 12 months, up from 51% in 2025.
The trend aligns closely with LP preferences, as investors seek more transparency, lower fee structures, and more customized exposure to attractive opportunities. Direct investments and co-investment structures can help address those demands.
Dynamo’s 2025 LP research identified growing the interest in direct investing, and this year’s GP survey suggests managers are responding accordingly. For firms capable of sourcing high-quality opportunities and managing the additional complexity associated with direct investments, the strategy may represent a meaningful avenue for future growth.
Geographic Capital Deployment Rebalances
North America regained its position as the primary target for capital deployment, rising to 51% this year from
46% in 2025. While still below the highs seen in 2023 and 2024, the increase suggests renewed confidence in the region’s investment environment.
Europe continued its steady ascent, reaching 26% compared with 19% last year. The trend reflects growing investor interest in opportunities across the region.
Meanwhile, Asia’s share declined to 19% after surging to 30% in 2025. But, instead of a retreat, the change may indicate a normalization following unusually strong interest the previous year.
Collectively, GPs seem to be recalibrating their regional risk and opportunity assessments.
An Industry Focused on Growth Through Adaptation
The theme emerging from Dynamo’s 2026 GP survey is adaptation.
Rather than pulling back in the face of difficult fundraising and competitive pressures, GPs are investing in new funds, expanding technology budgets, hiring talent, embracing AI, and refining fundraising strategies.
Facing headwinds is to be expected and the GPs of 2026 are showing fortitude in how they adapt to them. View the full 2026 Dynamo Frontline Insight Report.
Frequently Asked Questions (FAQ)
Unlike standalone tools, Dynamo delivers an end-to-end platform that connects fundraising, CRM, investor relations, portfolio management, reporting, and AI. This eliminates data silos, improves collaboration, and creates a single source of truth across the firm.
Dynamo enables greater transparency, personalized communications, detailed investor reporting, and stronger relationship management—all critical factors as LPs demand more information, responsiveness, and customized investment experiences.
Yes. Dynamo streamlines fund launches by helping teams manage fundraising pipelines, investor communications, subscription processes, compliance requirements, and ongoing investor servicing within a unified platform.
Dynamo automates repetitive administrative tasks and data-intensive processes, allowing investment professionals to focus on strategic activities such as deal evaluation, investor relationships, fundraising, and portfolio management.
Dynamo’s AI-powered solutions help firms analyze data, extract insights from documents, streamline workflows, support predictive analytics, and improve operational productivity across fundraising, investing, and investor relations activities.
Dynamo centralizes investor data, communications, fundraising activity, and engagement history in one platform, enabling teams to build stronger relationships, identify opportunities, and maintain consistent communication with LPs.
Dynamo provides integrated CRM, investor relations, fundraising, and relationship management capabilities that help firms strengthen LP engagement, improve transparency, and differentiate themselves in an increasingly competitive fundraising environment.
Donna Parent is the Chief Marketing Officer (CMO) at Dynamo Software. Donna is responsible for the corporate brand, demand generation strategies, and go-to-market initiatives for promoting Dynamo’s end-to-end cloud-based platform to the alternatives ecosystem. She is focused on fueling lifelong relationships with consumers, businesses, and strategic partners. Connect with Donna on LinkedIn.
