24
Jun
Evolving dynamics: The GP stakes proposition
GP stakes investing has evolved from ad hoc arrangements with sovereign wealth funds seeking strategic footholds to a strategy in its own right with dedicated platforms that derive returns from manager income streams. As best practices have emerged around deal structures and valuations, investor interest has pushed from the large-cap into the mid-market space. For GPs, selling equity can be controversial but also potentially catalytic: enabling succession planning, supporting strategic initiatives, and institutionalising corporate capabilities.
- What is the primary motivation for selling a GP stake?
- How do investors assess the suitability of manager targets?
- What are the major challenges in structuring these deals?
- How are investors generating liquidity for LPs in GP stakes funds?
- Can GP stakes address Japan’s manager succession conundrum?
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SpeakersSoichi Sam Takata Executive Expert, Private Equity Tokio Marine Asset Management
Ward Young Senior Managing Director Blackstone Strategic Partners
Ali Raissi-Dehkordy Global Co-head of Petershill Strategies Goldman Sachs Asset Management
Ross Sarraf Managing Director, Co-Head of GP Stakes Hunter Point Capital
Michelle Cheh Partner Simpson Thacher
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Soichi Sam Takata has been with Tokio Marine Asset Management since the creation of the private equity investment team in 2002. Before that, Mr Takata was at Tokio Marine & Nichido Fire Insurance (Tokio Marine) working in their alternative investment team from 1997 to 1998, and again from 2001 onwards, managing a global portfolio of private equity, hedge funds, infrastructure funds, CDOs/CLOs and other alternative assets.
Mr. Takata spent three years at Tokio Marine Capital, Tokio Marine's private equity investment arm, working on management buyout and development capital transactions in Japan. During this period, he also spent time at private equity houses in the US and the UK. Prior to that, he spent over two years on secondment to the Export-Import Bank of Japan (now the Japan Bank for International Cooperation) working on project finance transactions around the world.
Mr Takata began his career in the international investment department of Tokio Marine overseeing an international portfolio of managed assets. He has a BA in economics from Harvard College.
Edward (“Ward”) Young is a Senior Managing Director in Blackstone Strategic Partners. Mr. Young serves as the Chief Investment Officer of Blackstone GP Stakes, focusing on the acquisition of minority ownership interests in private-market alternative asset management firms. Before joining Blackstone in 2019, Mr. Young spent more than 12 years at The Carlyle Group, where he focused on investments in the Infrastructure and Power sectors. Before joining Carlyle, he began his career at UBS Investment Bank. Mr. Young received an A.B. in History and Political Science from Brown University, where he graduated magna cum laude with high honors and an MBA from Columbia Business School.
Ali Raissi-Dehkordy serves as the global co-head of the Petershill business, an $18 billion GP stakes investor. Petershill is the earliest and a leading GP Stakes investor since its founding in 2007. As a partner at Goldman Sachs Asset Management, which manages $3.6 trillion in assets, Ali serves as the global co-head of the Petershill business, and Chair of the GP Stakes Investment Committee.
Ali directs investments in both leading private-market and public-market managers. This includes management company investments through the Petershill GP Stakes program and support for earlier-stage private-market managers through the Petershill Early Stage program. With over 19 years of experience in the GP Stakes Industry, Ali has led and overseen more than 50 GP stakes investments, shaping the growth of the GP Stakes industry since Petershill’s founding 19 years ago.
Today, Petershill holds GP stakes in highly regarded specialist Alternatives Asset Management Companies, collectively managing around $500 billion in industry AUM or close to 5% of Alternatives AUM.
Mr. Sarraf is a Managing Director on the Investment Team at Hunter Point Capital and serves as Co-Head of GP Stakes.
Prior to joining HPC, Mr. Sarraf served as a corporate associate at Fried, Frank, Harris, Shriver & Jacobson LLP, where he focused on mergers and acquisitions and private equity transactions and gained extensive experience leading GP stakes transactions.
Mr. Sarraf earned his B.A. in History from George Washington University, his J.D. from the University at Buffalo School of Law and his M.B.A. from the University at Buffalo School of Management.
Michelle Cheh is a Partner in Simpson Thacher’s Hong Kong office, focusing on Private Funds and Funds Transactions. She has extensive experience in advising on both fund formation and secondary transactions in the Asia-Pacific region. She advises sponsors on the formation and structuring of private investment funds across numerous asset classes, including private equity, private credit and real estate. Her practice also focuses on GP-led and LP-led secondaries and liquidity solution transactions including continuation funds, LP portfolio sales, stapled secondary offerings, fund recapitalizations and restructurings and management team spin-outs.