GP stakes

“At one point, it was very fashionable to want to buy a part of the GP. Or want to, you know, have an ownership stake, or buy some of the cash flow of a hedge fund. We did one of those, and it's been fine. It's worked out. There's still a partner. It's been fin…”

“So because of the pricing environment, and because of the time intensity, we haven't invested a lot of time and energy in stakes recently. I view the seeding business as a challenging but more sustainable opportunity.”

“But if you're able to at least get that second fund in after buying a stake, you're pretty much guaranteed to get your money back just off management fees and some of the maybe in ground carry.”

“Performance of the fund, and when we looked at this, we looked at private equity, credit, and real estate, and effectively, the proportion of top quartile, second quartile, et cetera, funds is the exact same before and after. I mean, there's a marginal shift. …”

“But in general, if you had to place it in one, I think growth equity does make some sense. These are minority stake investments typically going to be used for some sort of growth action.”

“You're getting nearly half the return from yield, and the other half is from appreciation.”

“When Dial buys in or when any of these large firms buy in, they buy in with the Thought that we're going to hold this thing for 2030 years, even though maybe it's only underwritten out to 12 or 15.”

“If you own a piece of a hedge fund in two years, you're either just doing incredibly well or you're out of business. There's really not a lot in between.”

“The private equity business model and private credit and private real estate fit in the same bucket. But you have locked up capital. That's going to pay a contractually obligated management fee, regardless of what transpires with that business, which provides …”

“We've invested over a billion and a half dollars in that space in the last five years.”

“From an underwriting perspective, we still use that original lens of cash on cash returns. We certainly don't get the type of cash on cash returns that we got back then in the hedge fund space with 25% yields, but we really think about it from an underwriting …”

“It's hard to model a portfolio of LP interests, investing in funds, that will outperform a portfolio of investing in stakes.”

“If there's a large lump sum, whether it's a boutique firm or a huge organization, it's probably going to be tricky for that next gen to buy them out, which leads to Increased risk of a GP state coming in or an outside minority or majority investor, which neces…”