Limited partners backing venture firms are experiencing record concentration in AI, with nearly all LP capital flowing into OpenAI and Anthropic across multiple funds, according to interviews with LGT Capital Partners' Beezer Clarkson and TrueBridge's Amit Bhatti.
The two LPs describe the current moment as exciting but acknowledge emerging risks. Clarkson noted that funds are returning to limited partners on one-year pacing, down from a historical norm of two to two and a half years. Bhatti said 12 to 18 months is now common for faster-moving funds, a shift he called "a yellow light" that gives them "a little bit of heartburn."
Bhatti observed that many funds are bumping up their sizes mid-cycle, partly because large rounds like Anthropic's require outsized commitments. Seed round sizes have roughly doubled, forcing early-stage investors to write checks twice as large to maintain lead positions.
Both LPs see meaningful differences from past cycles. Bhatti noted that unlike the accelerated pacing during crypto's peak, today's companies are reaching $100 million in revenue, which he described as "totally unheard of before." Clarkson pointed to early-stage diversity remaining intact, with smaller dollar positions spread across more companies before capital aggregates into later-stage winners.
The 2021 vintage funds, five years in, present a mixed picture. Clarkson said the valuations from that era were extreme, making one-year fund cycles riskier. Bhatti noted that while most 2021 funds may underperform, breakouts like OpenAI and Cursor exist within them, and liquidity has accelerated through M&A deals exceeding $10 billion and exits like Cerebras.
On secondaries markets, Clarkson said they've become more sophisticated and prevalent over five years, though still concentrated in top-tier companies. He characterized this liquidity as necessary for venture's ecosystem, which depends on options beyond 20-year IPO timelines.