In the second report from the ILPA LP Sentiment Survey 2025-2026, ILPA provides a focused review of views towards retail capital. Retail capital is upending industry dynamics given the inherent issues with the “right strategy, wrong structure” design, which leads to challenges for LPs across core focus areas for ILPA – transparency, governance, and alignment of interests. To support LPs, ILPA also released a resource for members focused on Legal Language in Retail Capital to identify how to mitigate the conflicts more directly.
While LPs are not a monolith, the trends that emerge from the second report:
- LPs view the rise of retail capital as the single greatest threat to the alignment of interest between GPs and institutional LPs
- Expectations are negative for the impact on institutional LPs, GPs that take in retail capital, retail investors, and the broader PE industry
- LPs are significantly less likely to invest in a GP who is taking on significant amounts of retail capital
- LPs are expecting to shift away from Large Cap Managers and towards Mid-Market and Emerging Managers
Data was collected in Q42025. All responses were anonymized and aggregated to ensure confidentiality.
