Although longer fund lifecycles and slower exits are creating liquidity pressure, Limited Partners’ (LPs) appetite for alternative investments (ALTS) remains strong. A recent survey of global LPs conducted by Dynamo Software found that more than half (54%) plan to increase their private market allocations over the next year.
Rather than pull back on ALTS, LPs are reshaping how they participate in private markets. Their priorities for 2026 focus squarely on gaining greater input into General Partner (GP) decision making, which includes increasing expectations for more timely data and intelligence. Transparency, therefore, will be one of the primary levers GPs can pull to meet the evolving priorities of LPs.
For GPs looking to stand out in the highly competitive ALTS space, there is an opportunity to go even further. Embracing a standard of radical transparency is a strategic move to win LPs’ respect and confidence. By sharing process-level insight and real-time data that clarifies how decisions are actually being made, GPs can build trust faster and cement prized LP relationships.
One key way LPs plan to influence GP decisions
Co-investments are becoming an important strategy for LPs looking to realize greater control and visibility. In the aforementioned survey of global LPs, expected participation in co-investments climbed to 56% — five points higher than the prior year.
LPs are increasingly attracted to the “heads-up” nature of co-investments, which typically allow them to see deals before they close. That earlier view puts LPs closer to important decisions. While they may not directly influence the deal, their questions and reactions can shape how fast GPs move, as well as the depth of their due diligence and the manner in which they consider risk.
GPs stand to benefit from co-investments, too, not only by greasing the wheels for larger transactions but also through the relational strength co-investments create. When GPs rely on LP co-investment dollars, they take on a true partner, not just a fund investor. Naturally, this new closeness exponentially amps up the expectation for transparency and communication. As with any close partnership, co-investors expect to be not only informed, but also consulted, with their perspectives taken into account.
Evolving GP processes to align with new LP priorities
To meet this expectation in practice, GPs will need to structure touchpoints into their co-investment processes. This could take form in a few different ways, depending on GP operations, resources and culture. Some examples include:
- Establishing defined windows for LP questions
- Sharing preliminary underwriting views early in the process
- Creating “diligence snapshots” that highlight key risks and controls
- Offering short-form rationale updates when things change
- Investing in integrated data environments that serve as a single source of truth
These touchpoints help GPs set the stage for collaboration without completely handing over the reins to their co-investors. They signal respect for the partnership and create a repeatable process for incorporating LP perspectives.
Of course, touchpoints are only as valuable as the quality and quickness of the information shared in them. As LPs take a more active role, they’ll be looking for intelligence that goes beyond standard reporting. They’ll want something more along the lines of a living, real-time view of performance and pipeline details.
Ultimately, the central idea behind radical transparency is to strengthen alignment and trust. Transparency is not meant to relinquish control, but to reinforce that the GP’s process is disciplined, data-driven and reflects LP priorities. When GPs provide this new level of visibility, LPs gain confidence and partnerships are sustained for the long-term.
What radical transparency requires
LP portals, once used by GPs primarily to provide quarterly updates and capital notices, are evolving to meet changing expectations. Now much more dynamic in nature, these information platforms provide hyper-customizable views, like deal-level dashboards, pipeline visibility, automated co-investment tracking and scenario modeling, to give LPs a clearer understanding of their wins and exposures as they unfold.
What it comes down to is this: LPs are no longer satisfied receiving this kind of information months after the fact. Next-level investor portals, especially when enhanced with AI-powered workflows, greatly reduce the friction of back-and-forth information requests. As a result, LPs feel confident they are seeing the same truth the GP is relying on to make decisions.
Some GPs are cautious about offering “too much” detail, concerned that over-sharing could unintentionally disclose aspects of how they create value. When it comes to performance transparency, though, LPs increasingly expect present-moment insight into valuation drivers, risk controls and operational decisions that shape outcomes — none of which requires a GP to reveal proprietary strategy. LPs see the integrity of the process, not the mechanics of the GP playbook itself.
What communicating these insights does require is clean, consistent data and a willingness for GPs to explain how conclusions are reached. When LPs can track how assumptions evolve or see how a GP responds to new market pressures, faith grows. As it does, LPs will become more willing to support agile GPs that are developing new, creative deal structures — a dynamic expected to become essential to remaining competitive in ALTS.
Dynamo Software Senior Sales Director for Institutional & LPs, EMEA Region
The strategic payoff of radical transparency
Treating openness as a defining element of the GP value prop sends a strong signal. To do this, GP firms must first achieve internal alignment. Investment, finance, fundraising, investor relations and data teams need to operate from the same information and within shared workflows. Only then can GPs deliver the level of real-time intelligence more hands-on LPs expect.
Today’s LPs have more choices and higher expectations, so fresh ideas are essential. GPs that embrace a radical transparency standard will be best positioned to build durable relationships and earn ongoing co-investor support when those fresh ideas are brought to the table.
Ultimately, radical transparency lays the groundwork for the resilient GP–LP partnerships required to generate alpha. Trust becomes an organizing principle that spurs confident decision-making and reinforces the long-term performance advantages that continue to draw investors to the ALTs space.
To read more findings from Dynamo’s first-party research on the trends, challenges and plans of today’s global LP and GP community, visit dynamosoftware.com/resources.
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