Strategy in Focus: GP Stakes

With their potential for steady cash flow from fee-based revenues, investing in GP stakes can appeal as an alternative for new and existing LPs concerned about fund distributions in a more challenged exit environment.

• Funds investing in GP stakes have an estimated current AUM of $60bn. We believe this niche strategy will grow, benefiting from AUM growth in private equity

• Growth is predicated on more than 2,500 fund managers who might sell stakes in their business. Through the seeding of new managers, the market is expected to also expand at the lower end

• Target returns offered by GP stakes funds are typically within the 5–15% range but can be higher returns where experienced managers efficiently realize GP stakes equity potential