GP stakes takes its place in PEI 300 fundraisers
Selling a minority interest to a dedicated buyer can boost your next flagship fundraise.
Fundraising for GP stakes strategies has been lumpy in recent years. At least $3.4 billion was raised for the strategy last year, down 79 percent on the previous year, when almost $16 billion was collected in final closes, according to Private Equity International data. Firms collected $11.4 billion in 2021, and the previous year just under $900 million.
This year’s PEI 300 counts at least six firms that raise dedicated GP stakes funds. Blackstone , the top-ranked firm in this year’s list, is investing its $5.6 billion third Strategic Capital fund, and this year moved its GP stakes unit into its Strategic Partners secondaries group. The firm counts similarities between both strategies – such as the need to conduct due diligence at the underlying manager level, a shallow J-curve when it comes to investing, and comparable fund terms – as reasons why it makes sense to marry the two strategies under one umbrella.
Blue Owl Capital , which holds the title of having raised the market’s largest dedicated GP stakes fund with its $12.9 billion Blue Owl GP Stakes V vehicle, moved up two positions to 26. Meanwhile, Hunter Point Capital LP , which makes its debut in the ranking this year, raised $3.3 billion for its first such fund in March, beating its $2.5 billion target.
Age-old question
As the challenging fundraising environment continues into 2024, the question of whether and how selling a minority stake in one’s management company to a GP stakes buyer can assist with fundraising has become even more pertinent...
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