The State of the Emerging Manager report

What "emerging" means in this research

• Manages less than $100 million in committed capital.
• Is raising its first, second, or third fund as a firm.
• Is a firm less than five years old.
• Has at least one woman general partner on the founding team.

A fund needs to meet only one of these four criteria to be classified as emerging in this research. The definition is intentionally structural rather than purely demographic, built to reflect how funds actually get excluded from institutional search processes rather than relying on a single proxy like size alone. The underlying dataset captures only the gender composition of founding teams. Consistent data on other dimensions of founder background, including race and ethnicity, were not available across the full sample, so the fourth criterion is scoped to gender alone, and the research says so directly.

The headline performance numbers

• Internal Rate of Return (IRR): 17.15 percent for emerging managers compared to 9.94 percent for established managers, a 7.2 percentage point advantage.
• Total Value to Paid-In (TVPI), total value created per dollar invested: 2.05x compared to 1.71x, a 0.34x advantage.
• Residual Value to Paid-In (RVPI), unrealized portfolio value still held: 1.19x compared to 1.01x, a 0.18x advantage.
• Distributions to Paid-In (DPI), realized cash already returned to investors: 0.89x compared to 0.77x, a 0.12x advantage.

The pattern holds across all four metrics, which is part of why the finding is difficult to attribute to chance or to the timing of a few large exits.

The pattern holds regardless of how "emerging" gets defined

A reasonable objection to a finding like this is that it depends on where the lines get drawn. Colibrí Institute tested that directly, re-running the analysis under four alternative definitions of emerging status. A structural-only definition, dropping the founding-team criterion entirely and relying only on fund size, sequence, and firm vintage, still shows a 7.4 percentage point IRR advantage. The three-plus-criteria subset, funds meeting at least three of the four emergence markers at once, the most constrained group in the sample, shows the strongest gap of any cut tested, a 13.8 percentage point IRR advantage. Compounding constraints sharpen the performance difference. They do not dilute it.

How emerging managers configure portfolios differently

• Average check size: $17 million for emerging managers compared to $60 million for established managers.
• Portfolio size: 28 portfolio companies on average compared to 37.
• Sector exposure: roughly 31 percent broader on average.
• Dry powder held back: $25 million compared to $62 million.

Emerging managers also invest slightly earlier on average. None of this is accidental. It is what disciplined portfolio construction looks like under real capital constraints, and it is the subject of the Institute's benchmark cuts, covered in full by check size and by investment stage in the linked benchmark page below.

What this means for institutional allocators

Colibrí Institute frames the finding in terms of cost, not just opportunity. Institutional investors who underweight or exclude emerging managers are not avoiding risk. They are leaving measurable returns on the table, at a scale that compounds with allocation size.

• A $100 million venture allocation that underweights emerging managers forgoes roughly $72 million in IRR-driven value over a typical 10-year fund life.
• A $500 million allocation forgoes roughly $360 million.
• A $1 billion allocation forgoes roughly $720 million.

The Institute's own recommendation to allocators is to shift from size-based screening to capability-based screening, evaluating whether a fund's configuration choices align with its resource environment rather than treating assets under management as a proxy for risk. Colibrí Institute plans to publish this report annually, restating the headline numbers against a growing sample. The mechanism behind these numbers, why constraint produces this kind of outperformance in the first place, is covered in full on the performance gap explainer linked below.