2025 Global Alts New York: Why GP Staking Is The Best Of The Best

At the 2025 Global Alts New York Conference, Bradford Pilcher, Partner at Bonaccord Capital Partners; Joel Levin, Chief Investment Officer at LCA Capital; Michael J. O'Keefe, Chief of Staff at CAZ Investments; and Stephen Prince, Chief Executive Officer at Tetragon, spoke on the GP Staking Evolution: Balancing Growth, Control & Returns in Private Markets panel, where they explored how GP staking is reshaping private markets. The panelists outlined key drivers behind the strategy, from income generation and consolidation trends to liquidity innovations, and reflected on how partnerships between capital providers and GPs are helping build scalable, enduring investment platforms.

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2025 Global Alts New York - Bradford Pilcher, Joel Levin, Michael J. O'Keefe, and Stephen Prince on GP Staking Evolution

Bradford Pilcher, a Partner at Bonaccord Capital Partners, defines GP staking as "simply a growth capital strategy focused on investing in private markets firms". It involves finding "great companies who have tremendous growth opportunities" and providing them with capital and operating expertise to help them "achieve their business plan". Returns are driven by "exposure to fee related earnings and carried interest and GP investment income".

Stephen Prince, CEO of Tetragon, largely agrees with this definition but highlights a distinguishing aspect of Tetragon: they primarily seek to "gain exposure to various alternative asset classes as an LP with our balance sheet capital". They find it "quite attractive to take our balance sheet capital and marry that with an ownership stake in the manager". For Tetragon, it often involves identifying attractive industries, such as "biotech or legal assets," and then looking to "buy, build or seed" a presence, combining both LP and GP capital.

Joseph Schwarz of Silly Austin notes that GP stakes traditionally, or often, refer to "owning a minority interest in a fund sponsor asset manager".

Michael J. O'Keefe, Chief of Staff at CAZ Investments, emphasizes that GP stakes offer "extremely unique exposure to the underlying assets". He lists key characteristics that make them "irrefutable" or "incredibly attractive" to "very large institutional buy[ers]":

• "Incredibly stable, contractually obligated management fees," providing "bond-like risk or downside protection".
• "Significant exposure to upside optionality".
• "Basically no correlation to broader markets themselves".
• "Broad-based exposure to alternatives in general". These attributes, according to O'Keefe, "cannot be replicated by by really any other subsegment of the market".

Consolidation and Its Impact on GP Staking

Consolidation is viewed as a "byproduct of the broader theme which is growth of private assets". It signifies the "maturing of an asset class" that hasn't been around that long, addressing previous concerns about illiquidity ("how do I get out?"). Selling to "bigger managers" through consolidation is now a popular path for liquidity, which "helps facilitate the the general cycle of a GP".