Despite challenging fundraising conditions last year, overall private equity capital raising volume was healthy at around $728 billion. Private Equity International’s annual fundraising report, which we published this week, showed that fundraising last year wrapped up about $100 billion lower than the prior year, although it was still the third-strongest year on record for capital raised.

Other data points also show that private equity firms are continuing to raise large amounts of capital: the debut PEI Fund Formation League Table, which we published on Wednesday, provides a view on funds and capital closed through the lenses of the law firms who advise the industry’s biggest names on the biggest funds. The top 10 law firms by aggregate value of funds that closed during the year to end-September, advised on vehicles that raised approximately half a trillion dollars between them.

While the US remains the largest institutional investor market, constraints including overallocation and a slowdown in distributions have forced managers to seek capital from elsewhere. TPG chief financial officer Jack Weingart said on the firm’s fourth-quarter earnings call on Wednesday that the LP market in Europe is the biggest source of untapped potential, along with insurance and high-net-worth channels. Ardian, one of Europe’s largest private markets firms, opened an office in Abu Dhabi last month to tap increasing investor demand in the region.

The mid-market is even widening its scope: Northleaf Capital Partners, the Toronto-headquartered private markets firms, broadened its LP base while raising its latest secondaries fund to include new European investors, Shane Feeney, managing director and global head of secondaries, told affiliate title Secondaries Investor this week. Meanwhile, Connecticut-headquartered Greenbriar Group, which collected approximately $3.5 billion for its sixth flagship this month, has seen more than double the proportion of non-US LPs including those from Europe, Middle East and Asia in its latest offering.

It’s no surprise GPs are seeking new sources of capital. Alaska Permanent Fund Corporation CIO Marcus Frampton, in a board meeting this week, proposed cutting the SWF’s long-term private equity allocation to 15 percent over two years, from 17 percent. February meeting materials show the fund’s portfolio risk level is increasing, mostly driven by private asset expansion. Also this month, investment staff at the $615 million Mendocino County Employees’ Retirement Association recommended against adding private equity to its portfolio, deciding the asset class would not significantly improve returns for the pension over the next decade, noting the increase in fees and workload it would have to take on.

As Matthew Swain, global chief executive of placement agent and advisory firm Triago, told us this week when he visited PEI’s London office, LPs are thinking even more strategically about their allocations. Whereas in the past an LP may have committed to large-cap funds, some are now using that same capital to commit to mid-market or lower mid-market funds instead and are pushing for greater rights, such as stronger GP removal clauses, a seat on the fund’s LPAC and/or more favourable economics – an incremental sign, perhaps, that tangible changes to the power dynamics between LPs and GPs are already upon us.