Capital Allocators – Inside the Institutional Investment Industry Wylie Fernyhough – Private Equity Stakes (Capital Allocators, EP.208)
Aug 13, 2021
Wylie Fernyhough, PitchBook’s lead private equity analyst, shares his deep insights into the world of private equity investments. He discusses the intriguing business of buying stakes in asset managers, covering historical context and perspectives from all parties involved. The conversation extends to the growing influence of private equity in sports, highlighting transformative franchise valuations. Wylie also dives into the challenges facing first-time fund managers and the emerging trends shaping the investment landscape.
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Early GP Stakes Deals
- Blackstone's stake sale to Niko Securities in 1988 marked the start of the GP stakes business.
- Later, AIG, CalPERS, and sovereign wealth funds bought stakes in firms like Apollo and Silver Lake.
Origin of GP Stakes
- Initially, large institutions sought closer relationships with fund managers.
- They aimed for better allocations and a share of the economic benefits they helped create.
GP Stakes Returns
- Investors in GP stakes gain a share of profits from carried interest and management fees.
- Returns can vary, with mid-market deals potentially offering the best risk-return balance.
