The GP stakes fund industry, just over a decade old, appears to be stirring an interest in limited partners to acquire their own piece of a venture capital or buyouts firm.
That’s according to McKinsey & Company’s Global Private Markets Report 2025, released this month. The report, which included a survey of 333 institutional LPs worldwide, found a substantial number of investors in GP stakes funds mulling over the idea of investing directly in private fund managers.
Among the LPs that have already taken the leap is the $353 billion California State Teachers’ Retirement System. CalSTRS in early 2023 bought an undisclosed stake in the management company of Just Climate, which makes venture capital and private equity investments in climate-focused technology companies, as Venture Capital Journalpreviously reported.
Some 43 percent of all LP respondents commit capital to GP stakes funds today, the McKinsey survey found, up slightly from its 2024 survey. Of the 43 percent, more than half are considering buying GP stakes on a direct basis.
The appetite is greatest among sovereign wealth funds, 70 percent of which said they were contemplating direct GP staking, unpublished McKinsey survey data shared with affiliate title Buyouts showed.
Perhaps more surprisingly, 56 percent of pension systems also flagged an interest in this option. They were followed by more than half of insurance companies, 38 percent of family offices and one-quarter of endowments and foundations.
Alex Edlich, McKinsey & Company
“Those LPs interested in the asset class, and who have conviction behind it, are saying this could be an excellent way to participate,” Alex Edlich, senior partner at McKinsey, told Buyouts.
GP stakes funds make long-dated minority investments in alternative asset firms in exchange for a share of income. Multiple general partners have sold pieces of themselves to fortify balance sheets and finance priorities, such as commitments to new funds and growth initiatives, and to access value-adding programs.
Three shops, Blue Owl Capital’s GP Strategic Capital, Blackstone GP Stakes and Goldman Sachs’ Petershill Partners, have dominated GP staking, accounting for most dealmaking and fundraising. But new entrants are providing more competition, among them Hunter Point Capital, which last year closed a debut GP stakes vehicle at $3.3 billion.
The success of the GP stakes fund industry during its relatively brief history is one of the reasons why some LPs are pondering a go-direct strategy, Edlich said. Existing funds, he said, have a “proven track record.”
Because of this track record, GP staking has also shown itself to “offer an attractive risk-return profile,” he said. Another factor driving investor thinking on the topic is the “organic growth of private markets,” which LPs are looking to capture through various means.
A few institutions, especially sovereign wealth funds, have in the past acquired minority interests in private equity firms. The prospect of a greater number doing so in future raises the question of how it might be done. Would most LPs invest directly in managers alongside GP stakes funds? Would some, presumably the largest, prefer to do this independently?
And if the practice expanded over time, how would it impact the traditional way LPs relate to GPs through fund partnerships?
Such questions were not put to respondents to the McKinsey survey. “What we do know,” Edlich said, “is there is meaningful interest from LPs to invest directly in private fund managers.”
The GP stakes fund industry, just over a decade old, appears to be stirring an interest in limited partners to acquire their own piece of a venture capital or buyouts firm.
That’s according to McKinsey & Company’s Global Private Markets Report 2025, released this month. The report, which included a survey of 333 institutional LPs worldwide, found a substantial number of investors in GP stakes funds mulling over the idea of investing directly in private fund managers.
Among the LPs that have already taken the leap is the $353 billion California State Teachers’ Retirement System. CalSTRS in early 2023 bought an undisclosed stake in the management company of Just Climate, which makes venture capital and private equity investments in climate-focused technology companies, as Venture Capital Journalpreviously reported.
Some 43 percent of all LP respondents commit capital to GP stakes funds today, the McKinsey survey found, up slightly from its 2024 survey. Of the 43 percent, more than half are considering buying GP stakes on a direct basis.
The appetite is greatest among sovereign wealth funds, 70 percent of which said they were contemplating direct GP staking, unpublished McKinsey survey data shared with affiliate title Buyouts showed.
Perhaps more surprisingly, 56 percent of pension systems also flagged an interest in this option. They were followed by more than half of insurance companies, 38 percent of family offices and one-quarter of endowments and foundations.
Alex Edlich, McKinsey & Company
“Those LPs interested in the asset class, and who have conviction behind it, are saying this could be an excellent way to participate,” Alex Edlich, senior partner at McKinsey, told Buyouts.
GP stakes funds make long-dated minority investments in alternative asset firms in exchange for a share of income. Multiple general partners have sold pieces of themselves to fortify balance sheets and finance priorities, such as commitments to new funds and growth initiatives, and to access value-adding programs.
Three shops, Blue Owl Capital’s GP Strategic Capital, Blackstone GP Stakes and Goldman Sachs’ Petershill Partners, have dominated GP staking, accounting for most dealmaking and fundraising. But new entrants are providing more competition, among them Hunter Point Capital, which last year closed a debut GP stakes vehicle at $3.3 billion.
The success of the GP stakes fund industry during its relatively brief history is one of the reasons why some LPs are pondering a go-direct strategy, Edlich said. Existing funds, he said, have a “proven track record.”
Because of this track record, GP staking has also shown itself to “offer an attractive risk-return profile,” he said. Another factor driving investor thinking on the topic is the “organic growth of private markets,” which LPs are looking to capture through various means.
A few institutions, especially sovereign wealth funds, have in the past acquired minority interests in private equity firms. The prospect of a greater number doing so in future raises the question of how it might be done. Would most LPs invest directly in managers alongside GP stakes funds? Would some, presumably the largest, prefer to do this independently?
And if the practice expanded over time, how would it impact the traditional way LPs relate to GPs through fund partnerships?
Such questions were not put to respondents to the McKinsey survey. “What we do know,” Edlich said, “is there is meaningful interest from LPs to invest directly in private fund managers.”
