2026 Perspectives in Private Equity: GP Stakes Investing in a Maturing Market

This article is part of the “Perspectives in Private Equity” series.

According to a recent report by Campbell Lutyens, GP stakes and GP M&A transactions reached record levels in 2025, with deal volume increasing 40% year-on-year. The research recorded 164 private markets GP transactions in 2025 versus 117 in 2024, as the continued maturation of the alternatives universe is driving managers to seek optionality and capital to fund the next wave of platform growth.

Drivers of Activity

For GPs, both new and established, GP stake sales can provide numerous advantages. With the high start-up costs of market entry now for first-time managers, a growing number are seeking some form of GP stake investment or seed capital on day one. Even established GPs may seek equity investors in GP stakes as an efficient alternative to debt financing or to promote strategic partnerships that can accelerate growth and provide a marketing boost to the new funds when faced with the fund raising headwinds of the current environment.

Used properly, the proceeds from a GP stake sale can be used to seed and commit to new strategies or geographies, to make important investments or upgrades in technology or other operational capabilities, hire new talent and to increase their GP commitments in existing funds, if requested by investors, to demonstrate alignment with LPs.

In addition to fundraising and growth, GP stakes can also provide a crucial exit or liquidity strategy as many management firms enter their third or fourth decade.  Whether for succession planning or to reward key deal team members with enhanced access to liquidity in respect of equity grants or awards, cash from GP stakes can be deployed by the founders to incentivize younger talent and to provide a bridge to a refreshed ownership structure.

On the investor side, GP stakes buyers primarily come with one of two motivations: either a traditional “buy-and-hold” investment in a manager to gain exposure to the manager’s long-term economics, or as part of a broader consolidation play that can facilitate expansion into new asset classes, dealflow, markets or strategies.

GP stakes as an asset class offer an appealing combination of cash yield, capital appreciation and downside protection. Preqin estimates that the total estimated enterprise value of private markets GPs will double from $1.7 trillion in 2024 to $3.4 trillion by 2030, with that market growth underpinning capital appreciation along with the performance of individual GPs. Investors building portfolios of GP stakes can also benefit from diversification across strategies and geographies while capturing the carry and management fee income from each firm.

Structuring Trends

While the strategic rationale for GP stakes investments varies across managers and investors, the transactions themselves are highly bespoke and continue to evolve in response to market demand.  When providing seed capital, new managers will frequently require the GP stakes investor to make a simultaneous stapled commitment to a new, concurrent or future fund managed by the GP. Likewise, more mature GP stake transactions also frequently involve some commitment to the management company stapled with meaningful commitments to future fundraising. However, the terms of these deals are diverse and bespoke, with structuring dependent on the strategy, where the manager is in its lifecycle and how much leverage an investor has in negotiations. Certain technical needs may also drive structuring requirements, such as tax sensitivities or the growing use of “rated feeders” structures for insurance company investors, who may seek to make both their LP and GP commitments through the same rated vehicle.  These deals also ordinarily involve a restructuring of the manager or the fund to avoid triggering for LP consent and to avoid the investor appearing in the GP’s public disclosures.

One of the biggest shifts seen in the GP stakes investing landscape over the past few years has been the arrival of a more active investment philosophy. Gone are the days when investors used to be content to come in, provide capital, participate in the management fee and carry economics and enjoy enhanced LP returns. Now, it is rare to see even a 10% stake investor come in as passive, with GP stakes buyers looking for more involvement by way of consultation rights and negative consent rights over key strategic decisions and new business lines or fund launches. As such, these deals increasingly restrict the ability of a manager to be completely autonomous as GP stake investors become more sophisticated and more involved in the active management of their investment in, and strategic partnership with, the GP.

Exit Opportunities

Monetizing GP stakes investments has always been a challenge for investors, as traditionally no secondaries market for GP stakes existed to provide a natural exit. Though secondaries activity has begun to emerge more recently, and we have seen a few secondaries funds becoming more active in the GP stakes market, ensuring a path towards realizing investment returns remains a key point of negotiations in GP stakes transactions.

For example, while 15 years ago it was common for GP stakes investors to accept that revenue shares would continue for the manager’s lifecycle with no planned liquidity, as the market has matured, we have seen increased appetite to negotiate exit provisions like sales or put rights at the outset of these deals. Such liquidity mechanisms have been built into deals over the past decade, and we are now seeing whether investors will exercise those or use them as leverage to negotiate an alternative exit.  As these rights mature and investors and GPs come to terms with the ramifications of these exit rights, we expect to see further innovation taking place around achieving a balance between investors’ needs for liquidity and GPs’ desire for stable capitalization structures.

Market Outlook

As we move into 2026, the growth we have seen so far in the market for GP stakes shows no signs of abating. With both GPs and investors recognizing the power of GP stakes as a tool to satisfy the capital and strategic needs of asset managers, increasing familiarity is likely to continue to fuel activity. Absent a significant macroeconomic shock that impacts the performance of private funds managers across the board, we do not expect to see this market slow any time soon.  In addition, as more players enter the market, we expect a continuing trend in oversight sought by GP stake investors, leading to increased complexity as investors and GPs continue to craft bespoke solutions to fit their respective needs.