GP-led deals and a trifecta of benefits

A unique confluence of stakeholder benefits and needs is driving the increasing adoption of GP-led deals and the innovative structures through which they are being completed. As volatility has risen across markets, GPs are increasingly facing challenges and constraints associated with the customary 10-year fund life model in the private equity industry. Many GPs wish to retain exposure to their most attractive portfolio companies to maximize value while also meeting the liquidity requirements of their LP base.

LPs too face increasingly volatile global market conditions and a rising need for liquidity, or in some instances, a need to reduce oversized allocations to private market investments. GP-led deals offer LPs a timely solution to help navigate these challenges – with investors increasingly utilizing the accelerated distributions associated with GP-led deals to meet liquidity needs or to adjust allocations in response to market conditions.

Below is an overview of some of the key benefits and features for each of the parties in a GP-led transaction.

Benefits snapshot: A win-win-win

GPs

Existing LPs

New LPs/Investors

Ability to access high quality, top performing assets

Strong alignment of stakeholder interests

Accelerated liquidity

Increased optionality/portfolio flexibility

Access to unique market exposures

Ability to conduct deeper due diligence given continuity of GP

Source: HarbourVest

Below is an overview of some of the key benefits and features for each of the parties in a GP-led transaction.

Benefits snapshot: A win-win-win

Ability to access high quality, top performing assets

- GPs

- Existing LPs

- New LPs/Investors

Strong alignment of stakeholder interests

- GPs

- Existing LPs

- New LPs/Investors

Accelerated liquidity

- GPs

- Existing LPs

Increased optionality/portfolio flexibility

- Existing LPs

- New LPs/Investors

Access to unique market exposures

- Existing LPs

- New LPs/Investors

Ability to conduct deeper due diligence given continuity of GP

- Existing LPs

- New LPs/Investors

Source: HarbourVest