Beyond the data: what the Emerging Manager Survey discussion revealed

When we launched Stacking Up: Emerging Manager Survey 2026 at the AIMA Next Generation Manager Forum, the headline message was clear: momentum is building.

The survey points to a number of encouraging developments ‘stacking up’ for emerging managers. Emerging managers appear to be scaling more effectively, investors are showing greater willingness to engage earlier in a manager’s lifecycle, and firms are continuing to evolve their operating models in response to changing market expectations.

The discussion that followed helped bring those findings to life.

The conversation provided valuable context around what is driving these trends, where the challenges remain, and what emerging managers should be thinking about as they seek to build and grow their businesses.

Here are seven reflections that stood out.

1. Greater flexibility does not mean lower standards

One of the most encouraging findings from this year’s survey is that investors appear more willing to consider managers earlier in their development. Track record requirements have softened, fund size thresholds are coming down and some allocators are prepared to look at managers before they have reached significant scale.

That is clearly positive for the emerging manager community.

However, the discussion added an important qualification. Allocators are not lowering the bar. They are becoming more comfortable engaging earlier because many managers are launching and growing with stronger institutional foundations than previous generations.

This is a key distinction.

A shorter track record may be acceptable where the team is known, the strategy is well understood, the operational infrastructure is robust and the broader business has been thoughtfully constructed. Similarly, a smaller fund may be considered investable if the allocator is comfortable with the other investors in the fund, the operational model, the risk controls and the manager’s ability to sustain the business.

In other words, flexibility is being earned. It is not being given away.

2. Emerging managers are becoming better businesses

The survey highlighted increased headcount and rising breakeven levels across the emerging manager universe. On the surface, that might suggest a tougher economic model. The discussion provided more context around why this is happening.

Managers are investing earlier in compliance, operations, risk management, investor relations, technology and business development. Some of that reflects higher investor expectations. Some reflects regulatory pressure. Some reflects the growing complexity of running funds, managed accounts and more tailored investor arrangements.

But there is also a more strategic point.

Emerging managers are increasingly recognising that institutional infrastructure is not just a cost of doing business. It is part of the growth model.

A stronger operating platform can support more sophisticated due diligence, more demanding reporting, a broader range of investor structures and a more scalable business over time. For managers trying to move from launch to institutional relevance, that matters.

3. Fundraising remains difficult, even where appetite exists

Another important theme was the distinction between investor appetite and investor access.

The survey suggests investors are prepared to consider smaller funds, shorter track records and earlier-stage managers. Yet fundraising remains one of the most significant challenges facing the emerging manager community.

Those two points are not contradictory.

An allocator may be open to emerging managers in principle, but that does not mean every manager can reach them, secure a meeting, build trust and convert interest into capital. In a competitive market, access to the right investors remains critical.

This gives additional weight to another survey finding: prime broker capital introduction networks have become a more prominent route for sourcing new opportunities. For managers, the ability to access curated investor networks and have the right conversations with the right allocators can be just as important as the headline level of investor appetite.

4. Operational due diligence is becoming more sophisticated

Operational due diligence remains one of the biggest barriers to allocation. That was clear in the survey, and the discussion reinforced just how much this area has evolved.

Allocators are looking beyond the basics. They want to understand liquidity management, valuation processes, trade allocation policies, business continuity, governance, reporting quality and the long-term sustainability of the business.

This reflects a market that has learned from experience. Fund closures, operational failures and market stress events have all shaped how investors evaluate managers today.

For emerging managers, the implication is clear. Operational robustness is no longer something that can be built gradually in the background. It is central to allocator confidence and increasingly forms part of the investment proposition itself.

5. Structures matter, but simplicity still counts

The survey also explored the continued evolution of fund structures, including the growing role of separately managed accounts (SMAs).

The discussion added useful nuance here. SMAs can offer advantages for certain investors, particularly where they want greater transparency, control or customisation. They can also give managers a route to attract capital earlier or build relationships with larger allocators.

However, they are not always the simpler option.

For managers, SMAs can create additional reporting, operational and capacity management requirements. In some cases, they can almost resemble a separate business line. For investors, they can also bring more responsibility, more data and more internal oversight.

That helps explain why commingled funds remain highly relevant for the emerging manager space, despite the attention given to managed accounts with larger, more established managers. For many allocators, the simplicity, familiarity, audited track record and independent administration of a commingled fund remain attractive.

The lesson for managers is not to pursue one structure over another, but to understand the operational and commercial implications of each.

6. Alignment is becoming more nuanced

The survey showed that fees have remained broadly stable, while the use of hurdle rates has increased. The discussion helped explain why alignment is becoming more sophisticated than a simple debate about fee levels.

In a higher-rate environment, allocators are naturally more focused on what they are paying for and whether performance fees are genuinely rewarding alpha. This is especially relevant for low-net or derivatives-heavy strategies where cash returns may form part of overall performance.

At the same time, there is no single model that works for every manager or every strategy. Hurdles can improve alignment, but they can also create unintended incentives if they become too difficult to recover from after a period of underperformance.

The wider point is that alignment is becoming more strategy-specific, more investor-specific and more closely linked to the structure of the overall relationship.

7. AI is becoming part of the operating model

AI was also an important part of the discussion, although perhaps not in the way some might expect.

The survey showed that managers are adopting AI more quickly than investors are demanding it. The discussion suggested that many of the current use cases are focused on operations, reporting, analytics, research support and workflow efficiency rather than direct investment decision-making.

That aligns with AIMA’s broader work on AI adoption across the alternative investment industry, which has highlighted the growing use of AI tools to improve productivity and support more efficient business processes.

For emerging managers, this could be particularly relevant. AI has the potential to help smaller teams operate with greater efficiency and sophistication. It may support reporting, portfolio analysis, due diligence preparation and internal workflows, helping firms scale without adding headcount at the same pace.

However, the discussion also highlighted the importance of governance, oversight and data security. For firms handling sensitive investor, portfolio or family office information, the question is not simply whether AI can be useful, but how it can be adopted responsibly.

Momentum is building, but the bar is rising too

Taken together, the survey findings and the discussion point to a market that is becoming more supportive, but also more demanding.

Investors appear more willing to engage earlier. Managers are building stronger businesses. New technologies are creating opportunities to operate more efficiently. Fund structures are becoming more flexible.

At the same time, emerging managers are being asked to demonstrate more from the outset: stronger operations, better governance, clearer alignment, more thoughtful structures and more credible business plans.

That is the real story behind the momentum.

The opportunity for emerging managers is there, but it will be captured by firms that can combine differentiated investment capability with institutional-quality execution.

My thanks to Ted Parkhill, Chief Executive Officer and Co-Founder of Incline Investment Management; Jonathan Poon, Investment Director at Stable Asset Management; and Pieter van Putten, Director and Chief Operating Officer at Ahlström Invest, for sharing their perspectives and helping bring additional context to this year’s findings.

 

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Download Stacking Up: Emerging Manager Survey 2026 to discover how investor priorities, institutionalisation, fundraising and operational strategy are shaping the next generation of hedge fund businesses.