More than half of GPs anticipate increase in tech budget

According to Dynamo’s latest Frontline Insight Report, more than half (51%) of emerging managers anticipate larger tech budgets during the next year, with 48% of those surveyed expecting budgets to remain constant.

The firm surveyed more than 100 global emerging managers for the report, attempting to understand investment trends of the next 12 months. It compared results from previous studies where LPs and larger GPs were surveyed.

Dynamo defines emerging managers as typically those with total AUM of less than $1bn.

Respondents to the survey were located across the US and Canada (80%), Australia and New Zealand (9%) and Europe (6%), with the remaining (5%) from Asia and Central or South America. A mixture of firms were surveyed, including fixed income, small-cap public equity and private credit (29%), PE firms (24%), hedge funds (23%) and VC firms (15%), with the remaining (9%) from corporate development or real estate.

High tech
In addition to the predicted increase in tech budgets, the report outlined the top solutions emerging managers are looking to invest in. Ranking first was fundraising and marketing, followed by deal management and then CRM and investor relations.

This sentiment was mirrored by LPs and larger GPs surveyed in previous reports. It is clear that the industry values the development of technology and the services it continues to provide.

One of the key priorities during the next year for emerging managers is revealed to be the removal of manual data tasks and the introduction of manual workflows. This was followed by enabling the team to handle new investment structures, and protecting and maximising portfolio value.

People first
Despite fears of a recession, emerging managers would like to prioritise increasing investment in internal headcount to help improve fundraising efforts during the next 12 months, followed by third-party data providers and technology platforms, according to the survey findings.

Demanding deals
Both emerging managers (52.4%) and larger GPs (52%) anticipated LPs will maintain their ESG and DEI reporting demands, with less than half of all managers expecting the demands to increase (42.8% and 45.3%, respectively).