Haynes Boone Partners Karma Samdup and Vicki Odette discuss the rise in GP stakes investing and what this means within the alternatives landscape in an article for RealDeals.
Read an excerpt below:
Does the rise in GP stakes investing, which we are seeing not just in the US but also across Europe, mark the emergence of a compelling new asset class within the alternatives landscape? Initially used by major LPs as a relationship tool, GP stakes investing has evolved into arguably a maturing strategy, delivering attractive economics and access for buyers, while unlocking strategic values for target managers.
At its core, a GP stakes investment involves a buyer acquiring minority equity interests in an underlying asset management firm, different to an asset manager acquisition. Buyers typically acquire 5-25 percent stakes in the target manager, participating in its management fees, carried interest, returns on capital and co-investments from both old and new funds, along with the capital growth of the target manager.
Read the full article at RealDeals.
