I don't come away from most events with a page of notes. The launch of 1551 Circle (a new event bringing together family offices) by 1551 Ventures last week was an exception, so I thought I'd write up what stuck with me:
Europe's scaling problem is still the elephant in the room
Nobody in the room was questioning the quality of what Europe is building. The innovation is world-class, and that's been true for some time. The problem sits around it: shallower capital pools, smaller fund sizes, a more cautious investment cycle, delayed liquidity and fragmented regulatory jurisdictions all compound into a gap that keeps widening rather than closing.
The theme that came up, and the one that I find most frustrating, is the paradox of European investors holding local startups to higher standards while allocating capital to US funds. European founders then relocate stateside and receive that same capital anyway. I've watched this cycle play out repeatedly, and it creates this odd dynamic where Europe inadvertently funds its own brain drain.
The irony is that European VC has quietly been outperforming the US on returns over certain time horizons. The talent is here and so are the ideas, think of Mistral AI, Lovable, and Revolut to name a few.
Secondary markets are growing up fast
The secondary market has moved well beyond its origins as a niche liquidity tool. Transaction volumes have roughly doubled year on year from '24-'25, GP-led activity is surging, and the buyer universe is expanding.
There was genuine optimism in the room about what this means for the ecosystem: better price discovery, more options for LPs and GPs to manage their portfolios actively, and real liquidity in places where it's been absent. For anyone who's sat through the slow grind of waiting for distributions in a constrained exit environment, the maturation of secondaries feels like a shift.
The question I keep coming back to is whether all this growth is actually making the market more transparent, or just more liquid. Those aren't the same thing, and liquidity without transparency has a habit of creating problems that only show up when conditions tighten.
Private credit looks healthy, with a caveat
Private credit continues to be one of the fastest growing asset classes, and the overall picture presented was resilient. The system looks healthier than many expected a couple of years ago.
The concern raised in the room, and one I share, was about what happens when too much capital chases the same opportunities. When there's more money looking for a home than there are quality deals to absorb it, terms loosen, returns compress, and risk concentrates in ways that only become obvious when conditions change.
The discipline that built private credit's reputation is the same discipline that needs to hold as it scales.
In-person due diligence still matters more than anything
Some of the best stories from the event were about what happens when investors actually visit the operations behind the pitch deck. One example involved a factory that couldn't actually produce the products investors had backed. You can build the most sophisticated model in the world, and it won't catch something like that.
I think there's a real tension in the industry right now between the drive to do more deals faster and the need for the slow, unglamorous work. Speed is only valuable when it's applied to the right parts of the process.
This is something we think about constantly at Allermuir Capital. Our Hebrides platform is designed to compress the time teams spend on evaluation, modelling, valuation, risk analysis, and documentation. The whole point is to give investment professionals back the hours they currently lose to manual processing so they can spend that time where it actually matters, and that is asking the questions that no model can answer. Good technology should make space for more human judgment.
AI in investment processes has moved past "if" and into "how"
The role of AI came up throughout the day, and the tone of the conversation has shifted from last year. People aren't debating adoption anymore. A lot of the firms at the event were now using AI in some capacity, and the ones that aren't are increasingly aware they're falling behind.
The harder conversation, and the one that dominated, was about integration. Most firms I speak to have adopted AI in some form, whether that's using LLMs to summarise documents, building internal tools for deal screening, or experimenting with portfolio monitoring. Far fewer have figured out how to make it stick within their day-to-day process in a way that genuinely changes how decisions get made.
The gap between "we use AI" and "AI is embedded in our workflow" is enormous, and I think it's where the real competitive differentiation will emerge over the next two to three years. It's relatively easy to bolt a tool onto an existing process, but it's much harder to redesign the process around what the technology makes possible.
That's where most of our energy is going at Allermuir right now. We're building Hebrides to sit within the investment process rather than alongside it.
Looking ahead
If there was one thread running through every conversation at 1551 Circle, it was this: the infrastructure of private markets is changing faster than most of the people operating within it. The question is whether firms adapt how they work, or just add new tools to old processes and hope for the best.