【硅谷银行】影响私人市场的趋势-2025年上半年报告-2025

TrendsImpactingPrivateMarkets

GlobalFundBankingOutlookReportH12025

Introduction

Facingmacroheadwindswhilemanagingwhat’sunderyourcontrol

Aswereflectonthepastyear,ourindustrycontinuestonavigatealandscapeshapedbyglobaleconomicuncertainties,shiftingmarketdynamicsandrapidlychangingtradepolicies.Whileheadwindspersist,privatefundsCFOsandCOOsarefindingwaystoadapt,positioningthemselvesforlong-term

successinanever-changinglandscape.

Thiseditionofourreportdelvesintothedetailsofhowclientslikeyouareworkingthroughthechallengesbroughtonbythecurrentenvironment,

specificallyintherealmoffundraising.MostfundsCFOsandCOOsexpectthedifficultfundraisingenvironmenttocontinuethroughtheyear,

citingaprolongedweakexitmarket,continuedmacroeconomicheadwindsandfiercecompetitionforlimitedpartner(LP)dollars.Still,therearesignsofgreenshootsintheLPspaceespecially,withhighnetworthindividuals(HNWs)startingtoappearinhighernumbersinrecentfundraises.InternationalLPs,meanwhile,areincreasinglylookingtoUSfundsinsearchofstabilityinalesscertainworld.

Thisreportalsodivesintotwohottopics.Thefirstconsiderstheevolutionoffirmsastheyraisesubsequentfunds.WithseverallargeLPsreopeningtosmallandemergingmanagers,dataonfundsizeandLPcompositionmaybehelpfulforfirmsastheymanagetheirgrowth.Thesecondisadeep-diveontaxtopicsasafollow-uptoourrecentSVBTaxSummitsinBostonandSanFrancisco.Thesesurveyfindingsrangefromtaxteamcompositionandoperationstoexpectationsfortheyearahead.Wehopetheyprovideclarityonhowyourpeersinbothprivateequity(PE)andventurecapital(VC)firmsaretacklingsomeoftoday’stoughestchallenges.

Asyoureadthroughthereport,weinviteyoutoengagewithusonanyquestionsorcommentsyoumayhaveaboutthefindings.Weareevergratefulforyourpartnershipandremaincommittedovertheverylongtermtotherelationshipswithyouandyourfirms,aswellastheprivatemarketsingeneral.

JesseHurley

HeadofGlobalFundBanking

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H12025GFBOUTLOOKREPORT2

Contents

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H12025GFBOUTLOOKREPORT3

4

Macro

COMMUNTY

ACautiousOutlookfor2025

ADVICEFROMSVB'SNETWORK

Q:Whenistherighttimetoestablishadedicatedtaxteam?

A:It’swhenbillsstarttopileupbecauseyou’recontactingyourexternaltaxfirmeveryday...It’swhenthetaxworkbecomesinefficient.

8

PrivateMarketTrendsSixAreastoWatchin2025

15

Spotlight:Tax

TaxTopicsforPrivateFunds

19

Spotlight:OperatingBestPractices2025SECExamGuidanceandAdviceforFast-GrowingVCs

22

AppendixSurveyDetails

SeanCarlson

HeadofTax,LightspeedVenturePartners

Page16

Macro

ACautiousOutlookfor2025

MacroPEDashboard

Recoveringreturnssignalstrongerinvestmentperformanceforprivateequity(PE)andventurecapital(VC)firms.

Fundraising

US-basedfunds,byvintage($B)1

PE:Buyout

2023$192

2024$6467%

PE:Growth

2023$19

2024$37▲97%

VC

2023$59

2024$4917%

Privatedebt

2023$79

2024$1384%

Investment

InvestmentbyUS-basedfunds($B)2

PE:Buyout

2023$313

2024$333▲7%

PE:Growth

2023$55

2024$86▲57%

VC

2023$147

2024$199▲36%

Performance

Rollingone-yearhorizonIRRs3

PE:Buyout

Dec.’23Jun.’24

PE:Growth

Dec.’23Jun.’24

VC

▲0.4pts.

Privatedebt

0.6pts.

3.5%

Dec.’23Jun.’24

Dec.’23Jun.’24

-5.3%

-4.9%

▲4.0pts.

1.3pts.

10.8%

7.5%

7.4%

8.0%

9.5%

Exits

DealvalueofPE/VC-backedexits($B)4

IPOs

2023$46

2024$47▲1%

M&A

2023$243

2024$266▲9%

Buyout

2023$198

2024$15024%

Notes:1)Basedonvintageyears,US-HQ’dfunds.DataasofMarch8,2025.2)VCincludesearly-andlate-stageVC.DataasofMarch4,2025.3)Internalrateofreturn.AsofMarch4,2025.Globaldata.4)ExitsbycompaniesbackedbyUSinvestors.IPOsincludesecondaryofferingsandreversemergers.Buyoutincludessecondary

buyouts.AsofMarch4,2025.

H12025GFBOUTLOOKREPORT5

Sources:Preqin,PitchBookData,Inc.andSVBanalysis.

MarketsinLessChartedTerritory

Wherewillthemarketgoin2025?Likelynotwheremostinvestorsexpect.

Historytellsusthatwhileeconomistsandequity

strategistsmaybesmart,theyaren’talwaysthebest

forecasters.Onaverage,prominentanalystshavemissedtheirS&P500targetsbydoubledigits~60%ofthetime

since2012.Headinginto2025,thevariationamong

estimatesisthetightestit’sbeensince2017.Evenmoreuncommon,analystestimatesareoverwhelmingly

positive,withthelowestexpectinga12%returnthisyearandthehighestexpectinga19%return.Wherethemarketendsin2025isanyone’sguess,butit’slikelynotwhere

forecastersexpect.MarketsentimenthasalreadyrapidlyreversedinQ1,leadingtohighvolatilityandsell-offs.

Thisyearinmanywaysisunchartedterritoryforthe

market.Since1928,therehavebeenonlyfiveinstanceswherethemarketdeliveredback-to-back20%+

performanceyears—allofthembeforetheturnofthecentury.Giventhathistory,whilethemarketcouldstilldeliverpositiveperformancethisyear,theforecastforstellarreturnsseemincreasinglyunlikely.Instead,

volatilityanduncertaintyseemmorelikelyduetopolicychanges,worriesoverelevatedinterestratesandvaluationsandaweakereconomicoutlook.

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WhatToExpect?HistoricallyNotWhattheExpertsPredict

S&P500end-of-yearpricetargetestimatesfromtopbanksandfinalyearS&P500return1

ActualS&P500performance

AnalystS&P500performanceestimatesatbeginningoftheyear

Averagedifferencebetweenanalyst

estimatesandactualS&P500performance

30%20%10%0%

-10%

-20%

-30%

20122013201420152016201720182019202020212022202320242025

Tightestbandofestimatessince2017

Analysts

tendto

underestimatemarkets

MostReturnsAreLowDoubleDigits

ShareofannualS&P500returnsbyperformancebuckets2

24%

TrajectoryofPastBack-to-Back20%+YearsS&P500performanceofpreviousback-to-back20%yearsby

month,indexedto100

225

200

175

150

125

100

75

,95-,97

,96-,98

,97-,99

,54-,56

Current

,35-,37

20%

14%

15%

11%

6%

3%

2%

3%

1%

-40%to-50%

-30%to-40%

-20%to-30%

-10%to-20%

0%to-10%

0%to10%

10%to20%

20%to30%

30%to40%

40%to50%

0369121518212427303336

MonthsfromJanuaryoffirst20%year

Notes:1)S&P500pricereturn.Analystestimatesasofpreviousyear,whereapplicable.2)Includesdatafrom1928to2024.

H12025GFBOUTLOOKREPORT

6

Source:BusinessInsider,Barron’s,TheStreet,YahooFinance,CNBC,Reuters,FinancialTimes,Forbes,StreetInsider,sellsidecompanyreports,S&PCapitalIQandSVBanalysis.

WhatGoesUpMightStayUp?

RegulationandinflationmayleadtheFedtohesitateon

furtherratecutsastheTrumpadministrationcontinuestopursueinflationarytariffs.Therangeoftariffpossibilities

remainswideamidcontinuednegotiationsandfluiddetails.

PEislikelymoreinsulatedthanthebroadereconomy,

givenamajorityofitsindustryexposureisconcentratedintech(~43%ofNAV),wherevaluecreationisderivedfrominnovationandintellectualpropertycomparedtomore

import-reliantindustries.1Nevertheless,tariffscouldtriggerwidespreadmacroeconomicheadwindsandmaterially

contributetoinflation.

Higherinflationgenerallymeanshigherinterestrates,

whichinturnhasimplicationsforprivateinvestorsintheformofhigherborrowingcostsandanLPbaseless

interestedinriskyassets.TheFedhascelebratedinflationfallingfromitspeaks,buthasalsoacknowledgedthatitremainsstubborn.Tariffsmayonlymakethingsworse.Infact,arecentstudybytheBostonFedestimatesthat

currenttariffscenarioscouldcontributeupwardof2%toPCE.2,3Whileinflationmaybemoremodesttoday,ithasoutpacedtheFedtargetaswellasincomes.ThistrendhasbeenparticularlynotablefortheCommonManCPI,4,5

whichattemptstoisolatetheitemsthattheaveragepersonbuysregularly,suchasfood,energy,shelter,clothing,etc.TheFedmustnowenteranewphaseofitsbalancingact,asitweighsthecontinuedfightagainstinflationwith

emergingconcernsaboutthehealthoftheeconomy.

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TariffsCouldBeHighestinModernHistoryUSweightedaverageeffectivetariffrate

FedModelSeesTariffsIncreasingInflationContributiontoPCEinflationunderproposedtariffscenarios2,3

60%

50%

40%

30%

20%

10%

0%

Rangeof

Possibilities

60%China;

10%ROW

10%China;

25%Canada&Mexico

2.25%

2.00%

1.75%

1.50%

1.25%

1.00%

0.75%

0.50%

0.25%

0.00%

Low-end

estimate

Low-end

estimate

High-end

estimate

High-end

estimate

1790

1800

1810

1820

1830

1840

1850

1860

1870

1880

1890

1900

1910

1920

1930

1940

1950

1960

1970

1980

1990

2000

2010

2020

NoSignsofSlowingforInflationChangesinvariousinflationindicatorssince2019

CommonManCPI4,5HeadlineCPI5CoreCPI5Earnings6

EconomicFearsLowerRateExpectationsFederalfundsrate(FFR)andmarket-impliedpath

ObservedFFRMarketpricingMarketpricing

asofMar.12asofFeb.18

End-2025

6%

Today:

5%

4.4%

4.0%

4%

3%

3.6%

2%

1%

0%

30

25

20

15

10

5

0

CPIYoY

Dec’18

Mar’19

Jun’19

Sep’19

Dec’19

Mar’20

Jun’20

Sep’20

Dec’20

Mar’21

Jun’21

Sep’21

Dec’21

Mar’22

Jun’22

Sep’22

Dec’22

Mar’23

Jun’23

Sep’23

Dec’23

Mar’24

Jun’24

Sep’24

Dec’24

2020202120222023202420252026

7

2025GFBOUTLOOKREPORT

H1

Notes:1)ExposuredataaccordingtoNeubergerBerman.2)BasedonamodelbytheBostonFederalReserve.High-andlow-endestimatesreflectdifferentassumptionsinthemodel.3)Personalconsumptionexpenditures.4)CreatedbyStrategas.5)Consumerpriceindex.6)TheEmploymentCostIndex(ECI)measuresthechangeinthehourlylaborcosttoemployersovertime.Seasonallyadjusted,privatesectoronly.Source:Bloomberg,Strategas,BostonFederalReserve,LudwigInstituteforShareEconomicProsperity,YaleBudgetLabandSVBanalysis.

PrivateMarketTrends

SixAreastoWatchin2025

FundraisingOutlook:CautiousbutDivided

Despitehopesforarebound,fundraisingconditions

remainlargelyunchangedfrom2024to2025.AccordingtothefifthiterationofSVB’songoingsurveyoffundraisingtrends,sentimenthasstayedconstant,reflectinga

persistentlydifficultenvironment.Fundmanagerscitethreekeychallenges:aprolongedweakexitmarket,

continuedmacroeconomicheadwindsandheightenedcompetitionforLPdollars.

Whiletheoveralloutlookremainscautious,roughlythree-in-tenmanagersreportamoreoptimisticfundraising

outlook.ThesefirmsattributetheiroptimismtosustainedLPinterestinprivatemarketsandstrongtrackrecords

frompriorfunds.Interestingly,manyoftheseoptimisticrespondentsalsocitemacroeconomicconditions,a

directcontrasttothosewhoseetheenvironmentasaheadwind.Thissplitinperceptionunderscoresa

divergenceamongfundmanagers—whilesomeviewthemacrobackdropasimproving,otherssee

persistentchallenges.

Regardlessofsentiment,therealityisthatfundraising

remainssignificantlymorechallengingthanduringpeakyears.Fundmanagerscontinuetohavetosourcemore

LPsthanpre-peak,andfundsizeshavestartedtotick

down.Withmanyfundsstrugglingtoraisecapital,marketconsolidationmaybeonthehorizon,withstronger

managersacquiringtheirlessfortunatepeers.

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ASimilarFundraisingOutlookfor2025

Q:Howdoyouviewthefundraisingenvironmentgoingforward?1

mHardermAboutthesamemEasier

ExitMarketsContinuetoWeightHeavily

Q:Whatfactorsarecontributingtothisfundraisingview?2

Amongthosewhothinkfundraisingisgettingeasier:

Amongthosewhothink

fundraisingisaboutthesame:

PE2

VC

5%

49%

5%

41%

46%

5%

Weakexit

market

Macroeconomic

conditions

Competition

LPinterestin

privatemarkets

Firm’sprior

performance

Geopolitics

63%

6%

23%

7%

24%

30%

24%

29%

50%

51%

60%

71%

64%

19%

27%

16%

7%

28%

31%

21%

33%

21%

49%

45%

67%

72%

72%

22%

20%

12%

50%

49%

32%

32%

22%

H1’23H2’23H1’24H2’24H1’25

H1’23H2’23H1’24H2’24H1’25

FundSizesTickDown

Medianfundsizes,byvintageyeargroup

PE3VC4

FundManagersStillLookforMoreLPsAveragenumberofLPsperfund,byvintageyeargroup

PE3VC4

108107

10198

73

76

’17-’19’20-’22’23-’24

’17-’19’20-’22’23-’24

$420M$414M

$235M

$224M

$332M

$203M

’17-’19’20-’22’23-’24

’17-’19’20-’22’23-’24

VintageyearVintageyear

Notes:1)Amongthosewhohadanopinion.2)Thesamplesizeofthosebelievingthefundraisingenvironmentisgettingharderistoosmalltobreakoutthatcategory.3)PEincludesgrowthandbuyoutfundsinthisanalysis.4)BecauseVCsinoursamplemusthaveacapitalcalllineofcredit,theymaybelargerandmorematurethanthegeneralpopulationofVCfunds.

H12025GFBOUTLOOKREPORT9

Source:SVBproprietarydataandSVBanalysis.

WhatDoLPsWant?

Asmarketconditionsevolve,LPpreferenceshave

followedsuit.Afterthesurgeinearly-stageVCallocationsduringpeakfundraisingyears,investorspulledback,

favoringmorestableassetclasseslikebuyouts—an

enduringcornerstoneofinstitutionalportfolios.By2024,however,sentimenthadshiftedagain,with71%ofLPsexpressingrenewedinterestinearly-stageVC.With

valuationsresetting,manyseethisasaprime

opportunitytoreentertheearly-stageVCspace.

Privatecredit,whilestillarelativelysmallallocationinmostportfolios,alsocontinuestogaintraction.

ThoughLPpreferencesarelargelyconsistentacross

investortypes,subtledifferencesremain.Investmentfirmsleanmoreheavilytowardmorestableassetslikerealestateandcreditfunds,whilefoundationsand

endowmentsshowagreaterappetiteforhigher-riskVCinvestments.

Anothernotableshiftistheslowbutgrowingreturnto

emergingmanagers(EMs).Followingaperiodof

retrenchment,institutionslikeCalPERSandTexas

Teachershaverecentlyrenewedtheirfocusonsmaller

managers.3Therecouldbeanopeningforsmaller

managersorEMsinthecomingyear,asnearly90%ofLPsexpecttodenyare-uptoatleastoneexistingmanager

withinthenext12months.2Forthoseseekingcapital,though,astrongtrackrecordremainsthesinglemostimportantfactorforsuccess—akeychallengefor

generalpartners(GPs)justgettingstarted.

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57%

55%

38%

20%

13%

2023

52%

39%

2024

84%26%24%

$75M+

$30M-$75M

60%

$15M-$30M

58%

$5M-$15M

$0M-$5M

LPsReturntoEarly-StageVCandBuyoutPercentageofLPsinterestedinnewmanagercommitments,byassetclass

VC:Late-stageCredit

Growth

Buyout

VC:Early-stageRealassets

73%

71%

ManyLPsTarget$5M-$30MCommitmentsPercentageofLPstargetingeachcommitmentamount1

14%

46%

14%

80%

21%

15%

Foundations

Endowments

62%44%

43%

41%

InvestmentFirms

80%36%30%

79%

49%

36%

21%

18%

Pensions

FundPreferencesDifferbyLPTypePercentageofLPsacrossentitytypesinterestedinnewmanagercommitments,byassetclass1

VC:Late-stageCredit

Growth

Buyout

VC:Early-stageRealassets

79%

59%

62%

TrackRecordIsCritical,EspeciallyforEMsExternalSurvey:Ifyouareabletoinvestindebutfundsfrom

newlyformedGPs,whichofthefollowingfactorsareimportantandinfluentialfactorsinyourinvestmentdecision?2

98%

NewGPincludes1+individualswithanoutstandingrecord.

72%

NewGPwasformedfromspin-outofastrongcaptiveteam.

59%

NewGPwasknownfrompreviousworkingrelations.

56%

NewGP’sinvestmentstrategyisdifferentiated.

30%

NewGP’sfundhasbackingofasignificantcornerstoneinvestor.

Notes:1)BasedondatagatheredfromLPsbetweenJanuary2023andJanuary2025.2)BasedontheCollerCapitalsurveyfromwinter2024-2025.3)AccordingtoreportingbyPrivateEquityInternational(PEI).

10

2025GFBOUTLOOKREPORT

H1

Source:CollerCapital’s41stEditionGlobalPrivateCapitalBarometerWinter2024-2025,KirkFalconer’s“MeetingintheMiddle”fromPEI’sFebruary2025report,SVBproprietarydataandSVBanalysis.

WhereFundraisingDollarsComeFrom

Ineveryfundraisingcycle,anewwaveofLPsenters

privatemarkets—amixoffamilyoffices,fundsoffunds,foundationsandothers.AnotableshifthasbeentheebbandflowofHNWs.

ManyHNWinvestorssufferedfromthevaluationreset

followingthepeaktimesin2020-2021,leadingtoa

declineinenthusiasmfortheassetclass.By2023,theirrepresentationinfundshaddroppedmorethan10points,from57%to44%(byLPcount).Butin2024,participationbegantoclimbbackup,andthenumberofnewHNWs

investingintheindustryrose.WhileHNWsgenerally

representasmallportionofthetotalcommitted

capitalforafund,theyarelargeinnumberandare

growing.HNWportfolioallocationstoPE/VCremain

relativelymodestcomparedtoinstitutionalinvestors.

Becauseofthis,fundmanagersviewHNWs—and

increasingly,retailinvestors—asapromisinggrowthareaforfundraisinganddiversificationoftheLPbase.

Atthesametime,fundsarelookingabroadmorefornewsourcesofcapital.WhileWesternEuropecontinuestobethedominantsourceofinternationalcapitalforUSfunds,therehasbeennotableexpansionintheMiddleEast,

particularlyamongAmericanVCs.USfirmssuchGeneralCatalystandCampbellLutyensareevenestablishing

officesinGulffinancialhubsliketheUAEtocourtinvestorrelationships.6

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Foundations/

endowments

mmHNWaggregator

Other

In2024,theaverage

newfundhad34.3

HNWLPsthatwere

newtoprivatemarkets,upfrom29.6in2023.

FundsIncreasinglyTargetHNWs

CountofLPsnewtoprivatemarketsperfundraised1

HNWsStarttoComeBacktoPrivateFundsPercentageofLPsinprivatefunds,bycountofLPs2

Highnetworth(HNW)

mmFundsoffunds

0.9

1.31.1

mHNW3mFoundations/endowmentsmFundsoffunds

PensionsmFamilyofficesmOther

3.4

1.11.41.2

Familyoffices

2.4

2.5

2.6

2023

29.6

34.3

10%

7%

8%

10%

20%

44%

9%

8%

7%

11%

16%

7%

7%

7%

9%

15%

6%

8%

6%

9%

14%

5%

9%

13%

7%

7%

49%

58%

57%

54%

2024

ForeignLPInterestinUSPEontheRisePercentageofUSfundswithatleastoneforeignLP

PE5VC

20202021202220232024

Vintageyear

Asian,MiddleEasternLPsFocusMoreonVC

PercentageofforeignLPsinUSfundsbyregionoforigin,excludingUS-basedLPs4

PE5VC

88%88%

87%

85%81%

93%

Other

16%

Canada/Mexico

11%

Mid-3%

east

12%

Asia

WesternEurope

58%

Western

Other

Europe

17%

40%

12%

Canada/Mexico

11%

Mid-

21%

east

’17-’19’20-’22’23-’24

’17-’19’20-’22’23-’24

Asia

Vintageyear

Notes:1)CountofnetnewLPsaddedtoSVB’sdatabase,dividedbythecountofnetnewfundsaddedtothedatabase.2)PercentagebycountofLPsineachfund.3)Includesaggregators.4)Vintages2023-2024.PercentagesbyLPcount.5)PEincludesgrowthandbuyoutfundsinthis

analysis.6)Accordingtoindustryreports.

H12025GFBOUTLOOKREPORT11

Source:SVBproprietarydataandSVBanalysis.

PEFundsAcquireMoreLPsThanVCFundsAverageincreaseinthenumberofLPsperfundfrompreviousfund1

BiggestJumpsinFundSizefromFund1to2Averagegrowthinfundsizefrompreviousfund1

VCPEVC

PE

EvolutionFromFirstFundtoInstitution

Fundseriesnumber

1to2

2to3

3to4

47%

40%

52%

8%

39%

59%

LPBaseGetsMoreInstitutionalOverTime

AveragepercentageofinstitutionalLPsineachfund,byfundseries2

23.824.2

21.0

16.2

9.5

1.7

1to22to33to4

Fundseriesnumber

NumberofHNWLPsDecreasesOverTimeAveragepercentageofafund’sLPsthatareHNW,byfundseries2

TheevolutionofaPE/VCfundmanagerisdefinedbyitsabilitytoraisesuccessivefunds,growinsizeand

attractamoresophisticatedLPbase.Whilethepathisnotalwayslinear,clearpatternsemergewhenanalyzingfundgrowthandinvestorcompositionovertime.

Thelargestjumpinfundsizetypicallyoccursbetweenthefirstandsecondfund,reflectingthefirm’sinitialproofofconceptandearlysuccesses.VCfollowsasimilarpatterntoPEbutatasomewhatslowerpace.ThiscouldreflectabifurcationinstrategyamongVCs—whilesomechoosetoscaleaggressively,othersremainboutiqueinvestors,

stayingfocusedonnicheareas.PEfirms,meanwhile,

VCPEVCPE

oftenscalemorenaturally,astheirinvestmentstrategiesallowforbiggerdealsfromever-largerfunds.

5+

4

3

2

1

5+

4

3

2

1

%Fund

47%5+

56%4

57%3

57%2

61%1

%Fund

44%

35%

35%

35%

32%

%Fund

44%

38%

42%

41%

38%

%Fund

50%5+

54%4

50%3

53%2

55%1

Asfundmanagersraisesuccessivefunds,theybringinmoreLPs,butagain,PEfundsexperiencemoredramaticexpansion.RatherthanLPcount,however,thedefiningcharacteristicofafirm’sinstitutionalizationisthe

increasingshareofinstitutionalLPsovertime.Earlyfundsrelyheavilyonpersonalnetworksandscrappy

fundraising.ThisiswhereHNWsplayacrucialroleas

earlybackersofafundmanager.Inlaterfunds,however,afirmhasbuiltatrackrecordandattractsinstitutionalLPs,suchaspensions,endowmentsandfundsoffunds.Ultimately,theevolutionofafirmisaboutmorethanjustraisingcapital—it’saboutcreatingalastinginstitution.

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Notes:1)Amongfundswithinthesamefundfamily.Datawinsorizedatthe5thand95thpercentiles.Fundswithanactivecapitalcalllineofcreditareincludedinthisanalysis.2)Amongallfundsinthedatasetwithanassociatedfundseriesnumber.Fundswithanactivecapitalcalllineof

creditareincludedinthisanalysis.

12

H12025GFBOUTLOOKREPORT

Source:SVBproprietarydataandSVBanalysis.

ThePulseofCapitalCallLines

Followingthesignificantmarketcorrection,capitalcalllinesofcredit(CCLOCs)seemtohavefoundtheir

footing.Despitesomevolatilityintheindex,levelsofbuyout,growthandlate-stageVCCCLOCsended2024aboutwheretheybegan.

Atthesametime,ariseindirectcapitalcallsfromfundstoLPscouldbeapromisingleadingindicatorofastrongeryearahead.ComparedtoQ42023,Q42024saw22%

morefundscallingcapitaland38%moretotalcapital

beingcalled.However,fundmanagershavealsobeen

somewhatlessenthusiasticaboutkeepinglargebalancesoutstandingontheirCCLOCsforlongperiodsoftime

becauseofthehigherinterestrateenvironment.CallingmorecapitaldirectlyfromLPscouldreflectastrategytomitigatethesehigherinterestcosts.

Still,formanymanagers,theIRRbenefitoftheselinescouldcontinuetooutweightheirinterestratecost.

Usingasampleofcashflowsfrommorethan700buyoutfunds,ourmodelshowedthatatypicalfundthatpaysoffitsCCLOCattheendoftheyearstandstogain2.5pointsonitsIRRcomparedtoafundthatdoesn’tuseaCCLOC.Whentheinterestrateincreasesfrom6%to8%,thatIRRboostdecreasesbyjust0.4points.Forthisreason,

CCLOCscontinuetobeapopularwaytostreamlinefundoperations,reduceadministrativeburdensandprovideimmediateliquidityfortimelyinvestments.

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Market-LevelActivitySubscriptionLineIndex

Sumofallfund-levelcapitalcalllinebalances,three-monthmovingaverage,indexed1

PE:BuyoutPE:GrowthVC:Late-stageVC:Early-stage

120

100

80

60

40

20

120

100

80

60

40

20

120

100

80

60

40

20

120

100

80

60

40

Mar.’22

Jul.’22

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