BrazilDutch midcap alternative fund managers set for further growth in 2025
The Dutch alternative fund industry is set for another year of growth according to the Fund Survey 2025, despite mounting regulatory and operational complexity and a sluggish broader capital raising market.
The report, compiled by LeadingMile, Fundbuddy and Van Campen Liem, surveyed over 50 leaders from across the alternative fund industry to gauge their views on trends, outlook, opportunities and challenges. The study focused mainly on the midcap and smallcap segment of the market – known as ‘AIFMD light managers’ with assets under management of under €250 million (or €500 million in certain cases).
That segment has seen tremendous growth in recent years. Data from the Netherlands Authority for the Financial Markets (AFM) shows that the total number of alternative fund managers in the country eclipsed 750 last year, up 50% compared on five years ago. Growth was led by AIFMD light managers, who face lighter reporting and compliance requirements from regulators.
“The number of alternative funds with less than €500 million of assets under management has grown strongly in recent years,” noted Remko Dieker, founder of Fundbuddy. As per the Fund Survey 2025, the market is showing no signs of cooling. Around 8 out of 10 respondents told the researchers that they are raising funds or planning to do so this year.
Nearly half of those funds are aiming for between €50 million and €250 million, across key target groups such as high net worth individuals, family offices, entrepreneurs and mid-market companies seeking to put their capital to work in the private market.
Notably, some funds are planning to grow their current assets under management to such an extent that they would surpass the AIFMD light threshold. “Managers anticipating surpassing such threshold and transitioning to the AFM license regime should prepare for stricter regulatory requirements, including in areas such as compliance, risk, ESG and mandatory depositary appointments,” explained Martijn Voorhaar, CEO and one of the founders at consultancy firm LeadingMile.
Challenges ahead
Against the backdrop of growth, AIFMD light managers are feeling the brunt of having to deal with a variety of operational, technical and regulatory challenges. “These challenges are slowing down their capacity to expand efficiently,” said Voorhaar.
Key challenges cited by respondents include struggling to meet compliance requirements (such as SFDR, financial crime or investor reporting for tax authorities), legacy systems that have a high total cost of ownership and curb the adoption of scalable technologies, inefficiencies in front-office and back-office processes, and dealing with fund administration services.
“We believe that in order to be successful long-term, fund managers must take up these challenges head-on and invest in the robustness of their organization by improving efficiencies in their day-to-day operations. To be ready for growth they should reap the benefits from automation through implementing dedicated software solutions and gain access to the relevant compliance, tax and financial expertise,” said Voorhaar.
Another way for fund managers to boost their effectiveness is by turning to specialized fund service providers. Such companies specialize in taking over operations and the administration for back end processes. “By offering flexible solutions in fund administration, compliance and investor services, supported by automation and dedicated system solutions they can help managers navigate growth challenges effectively,” said Dieker.
Private capital
The results from the Fund Survey 2025 highlight how alternative fund management is one of the brighter spots in the private capital market, with both the private equity and venture capital segments demonstrating sluggish performance over the twelve months of 2024. According to McKinsey & Company research, private capital levels seen in 2023 and 2024 were among the poorest in the past six years.
However, private equity is expected to enjoy a stronger 2025 as buyouts pick up and more ‘dry powder’ is put to work.
