Investcorp White Paper Identifies Opportunities in Middle Market GP Staking

10 Oct 2023

Whitepaper assesses why positive sentiment among Limited Partners towards GP Staking continues to grow.

Investcorp, a global investment manager specializing in alternative investments, today released a new whitepaper, “The Continued Evolution and Growth of Mid-Sized GP Stake Investing,” assessing the opportunities in and growth of GP Staking – the process of acquiring a minority interest in the management companies and general partnerships (“GPs”) of alternative asset managers.

Authored by members of Investcorp’s Strategic Capital Group (“SCG”), the paper analyzes the momentum, evolution, and maturation of the GP staking space over the past several years. The whitepaper also explores why mid-sized private market firms are believed to be favorably positioned in the current cycle, and why they may be seen as appealing targets for GP staking funds and their limited partners (“LPs”).

“GP Staking is continuing to evolve as an attractive sub-strategy within private equity and we’ve observed increased fundraising activity, favorable LP sentiment and growing transaction volumes in the space,” said Anthony Maniscalco, Managing Partner and Head of SCG. “The proliferation of GP stake investments in the middle market over the last three years has been a result of their consistent underlying fund performance, which leads us to believe that mid-sized GPs will continue to be attractive investments for allocators looking for diversification across asset classes, geography and value-add potential.”

“We believe that well-structured GP staking transactions create strong GP/LP alignment, especially in the middle market, where the majority of transaction proceeds are typically reinvested into the businesses and where transaction structures ensure a smooth longer-term generational transition,” said Tim Osnabrug, Investment Partner of SCG. “SCG is confident that GP Staking will continue to grow as a compelling investment strategy for both GPs and LPs.”
Launched in 2019, SCG executes an investment strategy focused on acquiring minority interests in alternative asset managers, particularly GPs who manage longer-duration private capital strategies including private equity, private credit and real asset funds. SCG closed Fund I in April 2022 and now manages over $1.3bn of AUM. SCG has also completed 11 investment partnerships since inception.

For more information, download the complete white paper here.