Glossary · Structures

What is a GP stake?

A GP stake is a minority ownership in an asset manager itself, giving the investor a share of the manager’s management fees and often of its carried interest.

In practice

Specialist funds typically buy these stakes, usually in mid-sized and larger managers, and structure them as passive, non-controlling holdings. Terms vary: some stakes cover only fee income, others add carry and a share of the manager’s balance-sheet investments. Sellers often use the proceeds for succession, GP commitments or growth. It is not an LP interest in a fund, which backs one portfolio.

An example

Round numbers, not a real fund

Say an investor buys a 10% stake in a manager that earns $300 million a year in fees. It then receives a corresponding share of the manager’s earnings.

Why it matters

It lets managers raise capital without selling, and investors back a manager’s whole business rather than one fund.

In the news

Related terms

General partnerA general partner, or GP, is the firm that runs a fund, makes its investment decisions and carries legal responsibility for it. The term is also used for the manager.
Management feeThe management fee is the annual charge investors pay a manager to run a fund, often 1% to 2% of committed capital during the investment period.
Carried interestCarried interest is the share of a fund’s profits, typically 20%, that the manager earns after investors get their money back and clear the preferred return.
GP commitmentThe GP commitment is the money a manager and its partners invest in their own fund alongside investors, often a few percent of the fund’s total.
Fund of fundsA fund of funds pools investors’ money to invest in other private funds rather than directly in companies, which adds a second layer of fees.

The terms, in the news each morning.

FundOps Daily carries the day’s fund closes, deals and moves across private markets. Free, seven days a week.