The 2025 Investment Outlook: Navigating the Post-Landing Economy

It’s that time of year when the big asset managers roll out their verbose, jargon-filled investment outlooks, leaving most people’s heads spinning. But for emerging venture capital (VC) managers, the narrative is less about macroeconomic gloss and more about tactical positioning.

Let’s strip it down.

2025 is shaping up to be a year of liquidity revival, AI-driven disruption, and reshoring-fueled reindustrialization.

If you’re an emerging manager, this is your playbook:

1. Rates Go Down, Risk Goes Up: Seize Early-Stage Opportunities

Central banks are signaling a shift: rate cuts are coming. For VCs, this means two things: more liquidity and greater appetite for risk. As LPs rebalance portfolios toward risk assets, emerging managers who focus on early-stage, high-growth companies stand to benefit.

Why? LPs are looking for outsized returns that public markets can’t deliver. Emerging managers—often more agile and willing to go where institutional VCs won’t—can capitalize on this inflow by focusing on undervalued or overlooked markets, such as small-cap ecosystems in non-U.S. developed economies.

Pro Tip: Use this window to pitch yourself as a nimble, return-focused player. Show LPs how your fund can navigate this shifting risk landscape better than the incumbents.

2. AI: Not Just a Buzzword, but a Startup Revolution

AI remains the undisputed darling of 2025. BlackRock and J.P. Morgan are bullish on AI-driven productivity gains, but for VCs, it’s about spotting operationalized AI. Emerging managers are uniquely positioned to:

• Back startups that integrate AI into industries like healthcare, logistics, and manufacturing.
• Avoid overhyped "platform AI" plays and instead double down on niche, B2B verticals where incumbents are slower to adapt.

Emerging Manager Edge: Established firms chase the headlines, but emerging VCs thrive by identifying startups applying AI to underserved markets or legacy industries. Own the underdog narrative—this is where you win.

3. The New Geopolitical Dance: Reshoring as a Startup Catalyst

Geopolitics isn’t just noise anymore—it’s driving investment. As KKR and Invesco note, reshoring, energy independence, and digital infrastructure are reshaping supply chains. For VCs, this creates fertile ground for startups focused on:

• Advanced manufacturing and robotics.
• Green energy supply chains (e.g., battery tech, solar startups).
• Infrastructure-focused software solutions.

Emerging Manager Play: Be the fund that identifies early winners in the industrial innovation space. LPs are increasingly drawn to funds tied to long-term macroeconomic trends, and reshoring is a narrative they can sell to their stakeholders.

4. The Real Economy Gets Real(er): Cash Flow is Sexy Again

After years of speculative SPACs and moonshot valuations, 2025 is about cash-flow-positive startups. The shift to real assets means LPs are prioritizing returns over hype. As an emerging manager, this is your time to showcase:

• Capital-efficient founders: Highlight portfolio companies that can scale without burning cash.
• B2B markets: Enterprise software and industrial automation are ripe for steady growth in a low-rate environment.

Key Insight: Emerging managers often outperform in downturns because they invest in fundamentals over froth. Use this narrative to differentiate yourself from larger funds tied to bloated later-stage deals.

5. Private Markets: The Emerging Manager Sweet Spot

Schroders and J.P. Morgan Private Bank highlight how private markets remain a magnet for capital in 2025. For emerging VCs, the rising interest in private equity and infrastructure is both a challenge and an opportunity:

• The Challenge: LP competition is fierce, and you’re fighting against established players for limited allocation.
• The Opportunity: Emerging managers are uniquely positioned to offer access to smaller, undiscovered markets that big players overlook.

Emerging Manager Strategy: Focus on thematic niches like climate tech, frontier AI applications, or the circular economy. Show LPs how your smaller fund size translates into agility and better returns.

6. ESG: A Non-Negotiable for LPs

If you’re not building an ESG story into your fund, you’re already behind. LPs are under mounting pressure to demonstrate sustainability commitments, and funds without a strong ESG thesis risk being excluded from allocation.

Emerging Manager Play: Use your size and focus to craft a compelling ESG narrative. Whether it’s backing climate-focused startups or founders addressing social inequality through tech, make ESG core to your fund’s identity.

What This Means for Emerging Managers in 2025

Here’s the real takeaway: 2025 isn’t just another year of macroeconomic noise. It’s a defining moment for emerging venture capital managers to:

1. Position themselves as nimble, contrarian thinkers who find opportunity where others see risk.
2. Leverage macro trends like AI, reshoring, and rate cuts to identify early-stage winners.
3. Align with LP priorities—whether it’s ESG, capital efficiency, or cash-flow-positive startups.

Emerging managers thrive because they’re unencumbered by the bureaucracy and scale of legacy funds. Use this to your advantage. In 2025, LPs are looking for fresh perspectives, and the best emerging managers will deliver on that promise.

Sources

It's that time of the year again, the 2025 investment outlooks are out...

BlackRock iShares: https://lnkd.in/dbfnKxkf

Invesco Ltd.: https://lnkd.in/dgyAjW6D

J.P. Morgan Asset Management: https://lnkd.in/dSyDrwP7

Goldman Sachs Asset Management: https://lnkd.in/dwmtfUzu

KKR Infrastructure: https://lnkd.in/dBJTUe7i

J.P. Morgan Private Bank: https://lnkd.in/dWCiECCg

T. Rowe Price: https://lnkd.in/dvNJv6dU

BNP Paribas Asset Management: https://lnkd.in/dcUf6QUb

UBS: https://lnkd.in/d-UHVkx6

Morgan Stanley: https://lnkd.in/epUVdPqS

Robeco: https://lnkd.in/dqnAYePK

Columbia Threadneedle Investments EMEA APAC: https://lnkd.in/dGH5P5da

Amundi: https://lnkd.in/d9FZjqCM

Schroders PE: https://lnkd.in/d4Kg5-Ct

UBP - Union Bancaire Privée: https://lnkd.in/dJ4XJFPV