To Stake Or Not To Stake: GP Staking vs. Alternative Liquidity Solutions

Enter GP staking. A now well-established solution to this liquidity challenge, it is estimated that tens of billions of dollars have been raised by GP staking funds for the purpose of making minority investments in private equity sponsors. While we are also seeing strategic control transactions with some regularity in the market (e.g., one asset manager acquiring control of another), this article will focus on sponsors selling minority investments to GP staking funds, whose investment strategies are to acquire interests in GPs for the purpose of providing liquidity to the GP. There are numerous considerations to take