Some institutional investors are telling private equity managers they’ll only commit to upcoming fund raises if their capital tied up in old funds is released, according to reporting by Bloomberg.

Additional requests range from fee discounts and more co-investment opportunities to greater information rights and representation on committees, said the report, noting some are even asking for an opportunity to buy a stake in the fund manager.

According to the report, the change in tactics stems from disagreements between institutional investors and the $8 trillion private equity industry over corporate valuations and struggles by the private equity industry to provide appropriate returns. It noted the volatility of assets has recently pushed institutional investors to adopt a conservative approach, leading them, on occasion, to liquidate private holdings as a measure to protect the long-term outlook of their funds.

Read: CPPIB sells $2BN worth of fund interests, Caisse invests in Quebec media company

One commonly used justification for institutional investors asking for cash back is the so-called denominator effect, it said, noting where the value of assets from real estate to public stocks have proven volatile in recent years, private equity valuations have largely remained steady — at least on paper. This has meant that, in some instances, investors have liquidated private holdings to avoid breaching allocation guidelines designed to safeguard the long-term safety of funds.

However, fund managers have been slow to sell fund assets, indicating a reluctance to crystallize asset values that may be lower than expected, said the report, noting many are using leverage to release funds.

As sovereign wealth and pension funds raise their scrutiny and demands over private markets firms, including those in the $1.6 trillion private credit market, some are increasingly lending directly to borrowers and cutting out direct lending giants altogether.

Indeed, the Canada Pension Plan Investment Board and GIC Private Ltd. directly offered the largest portions of a €4.5 billion loan backing Blackstone Inc. and Permira Holdings’ purchase of European online classified company Adevinta in November.

Read: PSP part of consortium taking majority stake in video-telematics company