The third report from the ILPA LP Sentiment Survey 2025-2026 centers on the current exit environment and paths to liquidity. The persistent challenges in the exit environment are straining LP/GP alignment when considering how best to deliver liquidity; LPs are indicating a preference for long-term performance and exit discipline through traditional exits over near-term liquidity. These priorities shape LPs’ investment decisions and should inform how GPs weigh the trade-off between liquidity and long-term value optimization.
While LPs are not a monolith, the trends that emerge from the third report:
- The current exit environment and liquidity mechanisms have emerged as leading concerns for LPs. These issues were the top two selections when LPs were asked about the most important topic capturing their attention.
- LPs strongly prefer conventional exits and patience over alternative liquidity solutions, emphasizing a preference for the right path to liquidity over liquidity itself.
- The current exit environment is unlikely to cause a reduction in allocation to private equity; confidence in the asset class remains strong even though a dip in returns is expected.
- LPs prioritize long-term performance over short-term metrics when evaluating opportunities. They view the use of financial engineering as a potential threat to alignment.
Data was collected in Q42025. All responses were anonymized and aggregated to ensure confidentiality.
