LPs are pushing harder on terms and becoming more concerned about governance amid mounting fundraising pressures, according to Paul, Weiss's latest report on private equity fundraising trends shared exclusively with Private Equity International. The research shows limited partners are seeking greater control, sharper economics, and stronger protections against succession and zombie fund risks.

"Outside of fees, where there's always discussion, GPs facing fundraising challenges are more prepared to strike deals on discounts, whether through early closes or multiple discount classes," says Marco Masotti, global head of private equity at Paul, Weiss. This shift reflects a broader market dynamic where adversity is forcing general partners to offer more favorable terms to secure commitments.

The report highlights how current market conditions are reshaping the balance of power between limited and general partners. As fundraising becomes more difficult, LPs are leveraging their position to negotiate enhanced governance provisions, fee structures, and downside protections that were less attainable in stronger vintage years.