For the most part, established VCs have done a good job of managing their portfolios over the past 12-18 months. They’ve taken signi昀椀cant write downs where appropriate and have focused their portfolio companies on reducing burn and extending their cash runways. Michelle Ashworth Partner, Top Tier As a result, we think that most of our GPs are in relatively good shape. That said, we think there are a lot of companies waiting on the side-lines, reluctant to raise capital until they have to, that will have to come back to market next year. We think fundraising is likely to remain a challenge for all but the most high-pro昀椀le venture-backed companies over the next 6-12 months, so continued portfolio man- agement is paramount. We would advise GPs, if and when the fund- raising market improves, not to go straight back to where we were in terms of investment pace. A lot of VCs deployed a lot of capital in a short space of time between Q2.20 and Q2.22 and we know historical- ly that has not led to attractive returns. Some catching up to do Despite huge progress and an almost 50x growth in the value of the European tech ecosystem over the past two decades, the share of alternative assets under management (AUM) allocated to venture capital by Euro- pean-headquartered asset managers has actually declined over the same period. In fact, today, just 8% or $218B of European asset manager AUM allocated to alternative assets is allocated to venture capital. In 2000, at the peak of the dotcom period, this stood at 19% and then subsequently declined consistently to fall below double-digit levels in 2008. It has hovered in the mid-to-high single-digit allocation range ever since. To put this in a broader context, at 8%, European asset manager allocation to venture capital in 2023 is half of the US average of 16% (equivalent of $1,100B) and signi昀椀cantly lower than the global average of 21% (equal to $2,776B). For the US as well as global AUM allocation, the share held by VC has risen steadily over the last decade since hitting lows of 10-11% in 2013. 199 | Fundraising