Cantilever Group's Todd Owens - GP stakes: the best of all worlds? (live from New York)

Welcome back to the Alt Goes Mainstream podcast.

Today’s conversation features a live podcast that takes place at BTG Pactual’s NYC office for an audience in private markets.

We are joined by Todd Owens, the Co-Founder and Managing Partner of Cantilever Group, where BTG Pactual is an investor.

Cantilever is an independent firm focused on providing capital solutions to middle market asset managers. The firm's capital can be used to accelerate growth, support acquisitions or liftouts, fund GP commitments, seed new strategies, facilitate generational ownership transfer, and provide liquidity to founders. Cantilever focuses on asset management firms that have enterprise values between $50M and $500M. The team has executed on over $500M of GP stakes, financing, and seeding transactions as both investors and principals. The team's advisory experience working with stakes funds includes over 15 GP stakes transactions, multiple GP stakes portfolio financings, numerous GP and BDC IPOs, and dozens of asset management financing and control transactions.

Cantilever is working with two strategic partners as they build their firm: BTG Pactual, the ~$30B market cap Brazilian bank and wealth and asset manager has invested into Cantilever’s fund, and Broadhaven Ventures, the principal investment arm of Broadhaven Capital Partners.

Todd has over 30 years of experience as an advisor covering financial institutions and as a senior financial services executive. Prior to founding Cantilever, Todd has been a Partner at Broadhaven Capital Partners, an independent financial services focused investment bank that’s completed over $100B in announced M&A transaction volume, as well as the former CEO of Fifth Street Finance. Todd began his career at Goldman, Sachs & Co, spending 24 years including as a Managing Director and Partner in the Investment Banking Division.

Todd and I had a fascinating conversation about the GP stakes space and why the middle market represents a compelling part of the asset management ecosystem as the industry undergoes change and consolidation. We discussed:

• The early days of alternative asset managers going public.
• The evolution of the GP stakes market.
• The role that GP stakes investing can play in the growth of alternative asset managers.
• How and why GP stakes has shades of private equity, private credit, and secondaries in a single strategy. 
• A tale of two cities — the upper end of the market and the middle-market.
• What will liquidity look like in the GP stakes space?

Thanks Todd for sharing your wisdom and views on GP stakes and asset management.

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Show Notes
00:38 Welcome to the Alt Goes Mainstream Podcast

00:40 Live Podcast at BTG Pactual’s New York City Office

00:49 Introducing Todd Owens and Cantilever Group

02:26 Welcome to Alt Goes Mainstream Live

03:04 Todd's Background and Perspective

03:29 The Early Days of Minority Equity

04:28 Alternative Asset Managers Going Public

04:53 The Success of Public Offerings

05:32 Evolution of the GP Stakes Market

05:58 The Financial Crisis and Market Evolution

06:14 Understanding the Asset Management Business

06:47 Public vs. Private Market Perceptions

08:07 Middle Market Opportunities

08:37 The Role of GP Stakes in Firm Growth

09:05 Different Approaches to Building a Business

09:15 Lessons from advising Oaktree and Ares

09:27 Strategic Planning in Asset Management

10:14 Sophistication in the Middle Market

10:45 The Future of GP Stakes and Asset Management

11:48 Differences Between Upper and Middle Markets

14:46 Opportunities in the Lower Middle Market

16:03 The Persistence of the Middle Market

17:58 Wealth Channel and Private Markets

18:48 Evolution of Wealth Management

20:04 Democratization of Alternatives

20:24 GP Stakes as an Investment Strategy

20:54 GP Stakes: The Best of All Worlds?

20:59 Investment Strategies and Market Trends

22:08 Private Credit vs. GP Stakes

22:58 Betting on Private Markets Growth

23:17 Long Duration Capital in GP Stakes

23:47 Liquidity in the GP Stake Space

24:22 Managing Portfolio and Realizations

25:01 The Need for Liquidity Solutions

25:19 Quick Fire Questions

25:26 Favorite Asset Class in 2025?

26:06 Next Firm to Go Public?

26:16 Challenges of Merging Large Firms

27:21 Future of Middle Market GP Stakes

28:07 Conclusion: Live Podcast Wrap-Up

28:12 Thank You and Closing Remarks

Editing and post-production work for this episode was provided by The Podcast Consultant.