Five trends to watch in 2026

Liquidity is no longer a tactical consideration but is instead becoming a strategic pillar. With exit markets still constrained and IPO windows narrow, managers are increasingly turning to NAV financing and hybrid structures to unlock liquidity at the portfolio level. These tools, which were once seen as niche, have increasingly become mainstream.

• NAV facilities – According to Rede Partners’ 2025 survey, the volume of NAV financings rose by 144% between 2023 and 2025. Expect widespread adoption in 2026 as managers seek to bridge timing gaps and support distributions without forced asset sales.
• Hybrid financing – Combining subscription lines with NAV-based solutions offers flexibility and cost efficiency.
• Continuation vehicles and preferred equity – GP-led secondaries remain robust, enabling managers to hold high-performing assets longer while providing liquidity to existing investors.

The competitive dynamics among lenders are intensifying, driving innovation in pricing and covenant flexibility. For managers, the challenge will be balancing liquidity needs with long-term portfolio integrity.

Investor preferences are evolving rapidly and fund structures are adapting in response. Evergreen funds and SMAs are gaining traction, offering smoother cash flows and tailored governance rights. These structures reduce the J-curve effect and provide institutional investors with greater control over fees and exposure. 

Beyond traditional models, tokenisation and digital fund structures are emerging as a frontier for operational efficiency and liquidity. While still early-stage, these innovations could redefine how investors access private markets.

Another notable trend is the growing interest from retail investors and high-net-worth individuals. Semi-liquid vehicles such as Long-Term Asset Funds in the UK and European Long-Term Investment Funds are opening doors to new capital pools, although they bring additional regulatory and operational complexity.

Despite some commentary from Preqin in their Global Reports 2026 suggesting cautious optimism for 2026 I believe the fundraising environment will remain challenging for many and 2026 will see continued polarisation. Capital is concentrating among top-tier managers, while mid-market and emerging managers face longer cycles and heightened scrutiny.

• Flight to quality – Institutional investors are prioritising scale, track record, and operational resilience.
• Extended timelines – Longer fundraising periods mean subscription facilities remain essential, but LPs are demanding greater transparency on costs and leverage.
• Co-investment appetite – LPs are increasingly using co-investments to manage fee drag and gain more control, reinforcing the broader trend toward customisation.
• Specialist solutions – As liquidity needs grow and new entrants emerge, demand for bespoke financing structures, like Tranche B facilities and customised subscription credit solutions, is rising.
• Public ratings gain traction – Publicly-rated fund finance facilities are becoming more prominent, underscoring growing demand for transparency, standardisation and broader capital markets access in the fund finance space.

Managers will need to differentiate through sector expertise, operational excellence and innovative investor solutions to succeed in this environment.