Video – What private equity investors should know about GP-led transactions

GP-led transactions were born in the aftermath of the global financial crisis (GFC) but have grown hugely. They now represent around a third of all secondary investments.

GP-led transactions emerged as a solution to three main issues.

As a private equity fund approaches the end of its life, a general partner (GP) may believe one or more portfolio companies still have a great deal of growth potential. A GP-led transaction can allow them to maintain control, either with existing or new limited partners (LPs).

Alternatively, a company many be enduring a difficult period that has hindered, but not damaged, its case for growth. GP-led transactions can buy time to allow the business to stabilise.

Finally, a portfolio company may be in a challenged sector or geography, and the GP may wish to wait until the exit environment is more supportive.

In this video, Alternative Directors Emily Pollock and Tom Lewis discuss why GP-led transactions are likely to continue to grow, and ask our investors where they think the opportunities lie.