How I Invest with David Weisburd E248: The Institutionalization of GP Stakes: What Comes Next
Nov 24, 2025
Mark Wade, a Partner at CAZ Investments, shares insights on the evolving world of GP stakes and their value. He explains how firms have changed their approach to seek external capital for growth and alignment of incentives. Mark delves into the differences between GP ownership and LP investment, emphasizing the importance of partnership stability and leadership succession. He also discusses why sports franchises are a hot investment choice, highlighting their low correlation with market volatility and potential for robust returns.
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Private Markets Are A Long-Term Theme
- Private markets are growing long-term and owning GP equity captures that tailwind.
- Mark Wade calls GP stakes effectively GP growth capital rather than just selling interests.
Structures Have Evolved, Equity Still Preferred
- GP stake structures evolved from simple common equity to various forms including preferred and NAV solutions.
- CAZ focuses on earning equity rather than acting as a lender to capture upside in firms' growth.
GP Deals Often Finance Growth, Not Exits
- Many GP transactions are primary (growth) capital, not simply founders cashing out.
- Primary capital should be accretive if managers believe they can generate higher returns deploying new capital.