The LP Market Is More Concentrated Than the Companies It Invests In

The LP market is more concentrated than the companies it invests in.

5 firms captured 73.1% of all LP commitments in Q1 2026. Last year it took 12 firms to reach 75%.

I’ve been tracking this through Manthan Intelligence’s knowledge graph. This week a practitioner LP debrief circulated in the VC community. The numbers land differently when you see them together.

The structural shift:

Sovereign wealth funds were 1.8% of the venture LP base in 2005. Today: 15.2% — $548B committed (h/t @lananth). After 2022, distributions to traditional LPs collapsed from 29% to 11% of NAV. Endowments hit allocation ceilings. Pension funds couldn’t recycle capital. SWFs had no constraints and kept writing cheques.

The LP market consolidated around the only players with unconstrained capital.

It compounds at every layer:

Those same 5 dominant firms are putting 75% of their capital into 5 companies — who are paying $1M+ comp packages, pulling researchers and operators out of the rest of the ecosystem. Capital, deals, and talent. All three concentrating simultaneously.

The seed inflation tells the same story. @cartainc data: 95th percentile seed-stage post-money went from $65.6M (early 2022) to $173.6M in Q1 2026. A 2.6× increase in 4 years. OpenAI’s original angels put in ~$10M collectively and are now sitting on ~$1.4B. Those who led early rounds: ~150× on their Series A cheque in ~2 years.

If you’re outside the winner’s circle, you are not playing the same game.

The signal most people missed in the same debrief:

“A smaller family office can now open a £20 Claude and sanity-check the gap between what was promised 3 years ago and what actually got built — no analyst team required. The interpretation layer is no longer exclusively on the GP’s side.”

Two forces are moving in opposite directions.

The LP market is concentrating at the top. LP intelligence is democratising at the bottom.

The GPs who survive the next cycle won’t be the ones with the most capital or the biggest networks. They’ll be the ones who closed the intelligence gap before their LPs did.

This is exactly the problem Manthan Intelligence was built for. We track 13,800+ companies through a multi-dimensional analytical framework — because an emerging manager with real analytical infrastructure can compete with the information asymmetry that used to belong only to large GP teams with armies of analysts.

The window to build that infrastructure is now. Not because the tools are perfect. Because your LPs are already using them.

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