Strong performance remains essential. But in today's fundraising environment, institutional investors are looking beyond returns alone.
As private markets mature, LPs are placing greater emphasis on governance, transparency and the operational infrastructure that sits behind performance. Increasingly, they are assessing not only investment outcomes, but whether a manager has built a platform capable of supporting sustainable growth and meeting institutional expectations.
Speaking at PE Legal 2026 during SuperReturn week in Berlin, Christian Mohr, Partner and Head of Luxembourg AIFM at Langham Hall, shared four themes that are becoming increasingly important in LP due diligence:
1. Valuation governance matters as much as valuation outcomes
When performance is largely unrealised, LPs often focus less on the headline number and more on the process behind it. Investors want confidence that valuations are supported by robust governance, clear documentation and appropriate oversight. They expect methodologies to be applied consistently over time and assumptions to be capable of standing up to scrutiny.
Transparency is also becoming increasingly important. Many LPs want greater visibility into the drivers of value creation, including operational performance indicators that help distinguish between genuine business improvement and broader market movements. Valuations will never be perfect, but institutional investors increasingly expect discipline, consistency and a clear audit trail behind every decision.
2. Pre-marketing should be treated as the first phase of fundraising
Many managers still view pre-marketing as an informal precursor to fundraising. Increasingly, regulators and investors do not. Under AIFMD, pre-marketing is a regulated activity and requires the same level of planning and operational discipline that managers would apply later in the fundraising process, including clearly defined target investor groups, appropriate documentation and effective tracking of investor interactions.
Managers can also underestimate the complexity created by differing requirements across jurisdictions and the point at which pre-marketing activities may trigger formal marketing obligations. For many firms, institutional readiness starts long before launch. Pre-marketing should be viewed as phase one of fundraising rather than a soft, unregulated preliminary step.
3. LPs are underwriting the platform, not just the strategy
A strong track record may secure a meeting, but it is no longer sufficient on its own. Institutional investors increasingly assess the entire operating platform supporting a fund. Governance arrangements, reporting frameworks, risk controls and the delineation of responsibilities between the GP, AIFM and administrator are all coming under greater scrutiny.
Investors want evidence that oversight is real rather than theoretical. They expect timely reporting, meaningful transparency and a clear understanding of regulatory obligations. In many cases, LPs are evaluating whether the operating model is capable of supporting future growth as much as they are assessing historic performance.
Strong returns get managers in the room. Infrastructure gets them allocated.
4. Not all issues are viewed equally
Perhaps the most important distinction for managers is understanding which concerns investors consider manageable and which are far more difficult to overcome. Operational shortcomings, reporting gaps or developing infrastructure are often viewed as fixable, particularly for emerging managers. LPs are generally supportive when firms are transparent about challenges and proactive in addressing them.
Governance and integrity concerns are different. Questions around valuation behaviour, conflicts of interest or resistance to oversight can quickly undermine confidence and are significantly harder to remedy. Ultimately, trust remains one of the most important factors in any fundraising process.
Institutional investors understand that no platform is perfect. What they look for is transparency, accountability and a willingness to be challenged. LPs can live with imperfection. They cannot live with a lack of trust.
